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ssievers1
New Member

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

 
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TomYoung
Level 13

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

The term "sell to cover" is used to describe a situation where you either have to come up with some money to exercise an option or you need to come up with some money because either your receipt of the stock or the sale of the stock, (depending on the employer stock incentive program used), created compensation, or both.

The moment the GROSS number of shares is unarguably yours only YOU can sell any of the stock, so the "sold to cover" is YOU selling YOUR stock.  So, yes, "YOU" did sell stock and you need to report the sale.  

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7 Replies
TomYoung
Level 13

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

"Gifted stock from my employer."

Unless this was a very, very small "gift" - a handful of shares amounting to less than $50, say - I'd expect that you didn't receive these shares as a "gift."  More likely than not compensation income was created when you received the shares so my first suggestion would be to determine if that's the case here.

"Non-Covered" MEANS "Basis not reported to the IRS", we are not talking about two different things here.  The broker is telling you that THEY are not reporting basis to the IRS, so you need to provide that information from your own records.

As to "ST/LT?", that depends on your holding period.  Owned the stock for more than a year before the sale?  That's LT.  Owned it a year or less before the sale?  That ST.
ssievers1
New Member

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

Yes, comp income was created.  $1,000 of stock in 2018. 1099-B list proceeds of $819.55 on 3/2/18.  I never sold the stock.
TomYoung
Level 13

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

"1099-B list proceeds of $819.55 on 3/2/18.  I never sold the stock"

Well you must have, even if you don't understand that you did.  A 1099-B reports the SALE of stock.

Company name?
ssievers1
New Member

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

It was Sell to Cover.  The stock is still in my account.
ssievers1
New Member

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

That was the date the account was established.
ssievers1
New Member

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

Thank you
TomYoung
Level 13

Gifted stock from my employer.1099B says Gross Proceeds reported to the IRS,Non-Covered security,Basis was NOT reported.Do I choose non-covered or not-reported and ST/LT?

The term "sell to cover" is used to describe a situation where you either have to come up with some money to exercise an option or you need to come up with some money because either your receipt of the stock or the sale of the stock, (depending on the employer stock incentive program used), created compensation, or both.

The moment the GROSS number of shares is unarguably yours only YOU can sell any of the stock, so the "sold to cover" is YOU selling YOUR stock.  So, yes, "YOU" did sell stock and you need to report the sale.  
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