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Level 1
posted Mar 18, 2023 9:49:11 AM

Trouble Reporting Stock Appreciation Rights

I was granted SARs and acquired the vested shares almost 10 years ago which resulted in seeing additional compensation at the time I exercised the vested shares.   I sold those shares in 2022.   Do I report these sales as reported on my 1099B as Employee Stock or should I indicate that they are not employee stock?   If I report them as employee stock and use NQSO as the Turbo Tax option to report and use the adjusted cost basis, I all comes out as compensation with no gain.  If I report as not being NQSO, RSU, etc...  then I experience capital gain.    

 

What is the correct way to report the sale of these shares?   

0 2 510
1 Best answer
Expert Alumni
Mar 21, 2023 6:01:18 AM

If you know all of the amounts that need to be entered, ie: cost basis, sales proceeds, commissions, date sold, etc., then you can enter the transaction as a regular stock trade under Investment Income (1099-B).  Entering this information as a regular stock trade avoids the issues around RSUs or NQSOs. If you sold for more than the vesting amount, you'll have a capital gain.

 

  1. Type of investment: Indicate it is a stock sale.
  2. How did you receive?  Indicate purchase.
  3. Acquisition date is the date the SARs vested.
  4. Date sold will be on the 1099-B
  5. Proceeds should come from 1099-B
  6. Cost basis: amount reported to you at vesting.

2 Replies
Expert Alumni
Mar 21, 2023 6:01:18 AM

If you know all of the amounts that need to be entered, ie: cost basis, sales proceeds, commissions, date sold, etc., then you can enter the transaction as a regular stock trade under Investment Income (1099-B).  Entering this information as a regular stock trade avoids the issues around RSUs or NQSOs. If you sold for more than the vesting amount, you'll have a capital gain.

 

  1. Type of investment: Indicate it is a stock sale.
  2. How did you receive?  Indicate purchase.
  3. Acquisition date is the date the SARs vested.
  4. Date sold will be on the 1099-B
  5. Proceeds should come from 1099-B
  6. Cost basis: amount reported to you at vesting.

Level 1
Mar 21, 2023 6:08:55 AM

Thank you - this is so helpful!