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Level 2
posted Feb 1, 2022 2:52:42 PM

Value of expired BMY CVR

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

0 8 1289
8 Replies
Expert Alumni
Feb 1, 2022 3:12:26 PM

It depends. To clarify, how does your form 1099-B read? 

Level 2
Feb 1, 2022 3:21:49 PM

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)

 

 

Expert Alumni
Feb 1, 2022 6:43:08 PM

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.  

 

 

Level 2
Feb 2, 2022 7:38:25 AM

Thank you.  So just confirm  I DO NOT use the supplemental values and only use the zeros recorded on the 1099-B portion.

 

 

Expert Alumni
Feb 4, 2022 5:21:22 AM

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:

  • '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)'

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.

 

Level 1
Apr 7, 2022 2:29:19 PM

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

Expert Alumni
Apr 12, 2022 2:58:56 PM

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).

Level 1
Apr 12, 2022 5:08:49 PM

ErnieS0,

 

Thank you very much!  That's what I ended up doing, so this confirms what I did.

 

Thank you again!