Can someone advise me on how to report the expired CVRs from the Bristol Myers/ Celgene merger? I received these as an employee. I did not purchase. The conditions of the CVR were not met so they expired.
The 1099 I received has a cost basis for each lot on the supplemental section. Do all of the expired CVRs get reported as a loss? To me, since I didn’t purchase them, I didn’t sell them, and they ended up worthless, something seems wrong.
Thanks
It depends. To clarify, how does your form 1099-B read?
1099-b has: (expired for action), (quantity), (date acquired), (date disposed), then zero for 1d, 1e, and gain/loss.
the 1099 supplemental has: (type RSU), (quantity), (date acquired), (date disposed), (proceeds 0), (ordinary income reported $XXX), (adjust cost basis XXX), (adjust gain/loss -XXX)
Because the milestones applicable to the CVRs were not met, the CVRs were no longer eligible for payment. Because you received a 1099-B evidencing the CVRs and their value, albeit zero, you can enter the information into TurboTax just as it appears on your 1099-B. You may be able to upload the 1099-B into TurboTax without having to manually enter the information.
We realize these transactions will likely not have an impact on your return; however, the fact that you received a 1099-B, a document which is also filed with the IRS, it is appropriate to include them on your return.
Thank you. So just confirm I DO NOT use the supplemental values and only use the zeros recorded on the 1099-B portion.
Yes, you will use zero as the sales price since that is shown on the Form 1099-B is zero. However, in your description you noted ordinary income:
You do have a cost basis for the amount that was recorded as ordinary income, which would have been reported in your W-2 wages at some point. This means you do have a cost basis for the dollars you did pay tax on even though you didn't pay additional funds out of your pocket. This also shows that you have a loss on the transaction.
Hi,
I am also a BMS/Celgene employee with the same situation. Between 2019 and 2020, I have over $10,000 added to my W-2 for the CVR's. How do I deduct this in TurboTax? Also, I had to adjust the supplemental schedule for 2019 to match the value added to my W-2 for 2019. Thank you
You do not deduct the amount. Instead add the amount included in your pay. This is your cost basis at awesome Tax Expert @DianeW777 said.
You would record the sale using $0 as the sales price and the amount added to your W-2s as the cost basis.
This will give you a capital loss. You can use this to offset other capital gains and deduct up to $3,000 per year ($1,500 if married filing separate).