Re: Non-qualified stock option exercise
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Non-qualified stock option exercise

I did a cashless exercise of non-qualified stock options and surrendered shares to pay the tax on the income.   I intend to hold the net shares received and not sell them now.   My company ran all this through payroll and it is represented in my W-2. Is there anywhere else I need to report this on my return?

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Employee Tax Expert

Non-qualified stock option exercise

All shares were exercised.


The shares that were sold in order to get the money to purchase all shares are treated like this:

That's compensation that shows up on  your W-2 because you sold those shares without holding them for over a year from the date of exercise and two years from the grant date.


"Does that also get added to the AMT calculation or does it count as part of my regular income tax? Or is there no tax liability on that?"


It's not an AMT adjustment it's simply "compensation", compensation that will be taxed.


Since you are still holding the other shares exercised and purchased, then they won't be reported as sold until you do sell them.  


The income from the exercise of all shares is included in your W-2.


For additional information, please refer to the following link:

What to report of a cashless exercise of stock

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