1099-B supplemental information

[Jmcauley54]

I exercised and sold some Qualified Stock Option Shares (QSOP) in 2025. On my 1099, they are listed in the 1099-B section with the purchase price listed as the cost basis. 

I was able to use the supplemental information to use the "Adjusted cost basis" provided by Fidelity, similar to my RSU's where there was NO cost basis reported.

My question is that since the sale is listed in Box 14 of my W-2 and included in my wages, was using the adjusted cost basis in my supplemental information the correct approach? Or is there another value I should be using to avoid these sales being taxed twice?

[DavidD66]

Yes, the Adjusted Cost Basis in the supplemental information section of your Form 1099-B should be the correct cost basis.  The amount you paid plus the amount that was included in your income on your Form W-2 is your cost basis, and should be the same amount as the "Adjusted Cost Basis" in the supplemental information.  Your Qualified Stock Ownership Plan (QSOP) shares are taxed the same way that Restricted Stock Units (RSUs) are.

[ron6612]

You had helped me with this last year and have folow up question. 

As fiduciary I prepared final 1041 in 2020 for my mother after she passed. Five years later received unclaimed property from NJ and 1099 for $5000 interest income for those unclaimed years. The 1099 was sent to social security number of mother not ein of estate and NJ will not correct it. I know I can do the amended 1041 for 2025 reporting interest to ein of estate with explanation letter. The cash expenses were 3500 for legal probate fees and taxable income would be 1500 with 1041 tax due at $150. However would not want to prepare k1 if possible to me. The 1500 was kept by me as fiduciary and tax preparer. I spent something like 20 hours dealing with attorney on probate, NJ state in filing for unclaimed property and getting documents prepared, etc. 

Can I just show the 1041 as 1500 net income with 150 tax due and leave it at that (preferred) or do I have to deal with potential k1 preparation and then consider deducting my time which could be 2000 and then a 500 1041 loss and more k1 issues to deal with?

Just want to make this simple if possible and not have to deal with the k1 situation. 

Help Please

[ron6612]

You had helped me with this last year and have folow up question. 

As fiduciary I prepared final 1041 in 2020 for my mother after she passed. Five years later received unclaimed property from NJ and 1099 for $5000 interest income for those unclaimed years. The 1099 was sent to social security number of mother not ein of estate and NJ will not correct it. I know I can do the amended 1041 for 2025 reporting interest to ein of estate with explanation letter. The cash expenses were 3500 for legal probate fees and taxable income would be 1500 with 1041 tax due at $150. However would not want to prepare k1 if possible to me. The 1500 was kept by me as fiduciary and tax preparer. I spent something like 20 hours dealing with attorney on probate, NJ state in filing for unclaimed property and getting documents prepared, etc. 

Can I just show the 1041 as 1500 net income with 150 tax due and leave it at that (preferred) or do I have to deal with potential k1 preparation and then consider deducting my time which could be 2000 and then a 500 1041 loss and more k1 issues to deal with?

Just want to make this simple if possible and not have to deal with the k1 situation. 

Help Please

[DianeW777]

There are a couple of options, even if the estate was closed in 2020, you can file a Form 1041 for 2025 because it received reportable income in 2025. 

First nominee the 1099 from your deceased mother's social security number (SSN) to the estate EIN. Report the income on the estate return and deduct your expenses on that return. Any profit would be required to be distributed to beneficiaries (K-1) based on the instructions:

• Distributable net income (DNI). The income distribution deduction allowable to estates and trusts for amounts paid, credited, or required to be distributed to beneficiaries is limited to DNI. This amount, which is figured on Schedule B, line 7, is also used to determine how much of an amount paid, credited, or required to be distributed to a beneficiary will be includible in their gross income. IRS Instructions-Form 1041 2025 (page 4)

Nominee Returns.  This is how the IRS knows what you are doing.

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

• On each new Form 1099, list mother as the payer and the other owner (estate), as the recipient. On Form 1096, list mother as the nominee filer, not the original payer.  The nominee/executor is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy (use the form(s) needed) so if you don't have a color printer, go to the IRS website to fill in and print the forms here:  (use the one you received)

• Form 1096
• Form 1099-INT
• Form 1099-DIV
• Form 1099-S
• Form 1099-B
• Form 1099-MISC

@ron6612 

[ron6612]

I would like to make this simple rather than extremely complicated as there are just a few moving parts. That is an awful amount of work for this situation!  The interest income is $5,000. The attorneys fee is $3,500. I have spent about 20 hours of my time working with NJ and the attorney in getting the required paperwork to and from all parties (family members) so as to get a check from NJ for an unclaimed property that had been in their possession for 20 years and was required to go through probate. The proceeds was return of capital plus interest. 

My time was also spent unsuccessfully to get NJ to properly report the interest income to the estate rather than the trust ein number. And now I’m doing the tax return, etc. 

The tax rate for the trust on any small income would be 10% with no state income tax as trust was Florida entity.  Any tax to me as beneficiary would be at 24% plus 10% for state. 

I want to make this simple not a complicated project as you outlined if possible. 

My time could easily offset the $1500 net income to make trust net at 0. I don’t want to complicate this and distribute K 1 showing minor loss or minor gain as distribtable income. 

This amended final return is also a manual process for me!

Thanks for your assistance on this!

[DianeW777]

There may be expenses for your work on the follow through to obtain the unclaimed income. Examples of that could be mileage, postage, or any other actual expense you had to accomplish receipt of the income. Example of expenses that can be used:

• Court costs
• Accountants' fees, 
• Appraisers' fees, etc. 
• Cost of storing or maintaining property, including documentation of actions.  

Simply adding your labor as a cost would not be sufficient as a deductible expense, however if you tie it to the details required to accomplish the results of receiving the income, then the estate can handle the entire return.

Amending a 2020 return would not be my advice since it's beyond the statute. The income was received in 2025. You can attach a statement of explanation for filing another final return.

If you remain unsure of how you want to handle it you should seek professional assistance for preparation.

@ron6612