Should I report stock sale proceeds from board of director service (not employee) on a Schedule D, or a Schedule C? I received a 1099-B, but no 1099-Misc.

[beckland]

I was on the board of a company that was acquired. As part of the acquisition, the company was sold and shares were converted to cash proceeds. These were reported on a 1099-B from the escrow services brokerage.

Should I report this on my Schedule D? If so, should I still fill out a Schedule C to report my business expenses, even though it will show a loss for the business?

[TomYoung]

How did you acquired the shares you tendered?  Open market purchases?  Some sort of option program?  If so, what sort of program?  Maybe the shares were given to you in addition to cash?  If so, how did you account for the shares received?

[beckland]

Acquired through NQO 2 separate stock grants. Not reported on any W2. No cash received in addition to options; the board work was for options only. Thanks!

[TomYoung]

"Acquired through NQO 2 separate stock grants. Not reported on any W2. No cash received in addition to options; the board work was for options only. Thanks!"

This could be a problem if you didn't report the "spread" between the FMV of the stock received and your cost of exercise as Schedule C line 1 "revenue" when you exercised.  But if you did do that properly, (maybe the company issued you a 1099-MISC for each exercise?), then you're fine. 

The exercise of the NQSOs with the spreads reported on Schedule C have set the basis of those shares; each share has the same per share "fair market value" used to calculate the compensation income.  At this point you simply have a reportable sale of stock, nothing more.

Tom Young

[beckland]

This was a cashless exercise, all options exercised and sold in the same transaction in 2018. I have all the data to calculate the spread.

So I should report the spread as revenue on a Schedule C.

Then what do I do with the 1099-B issued from the broker? Just file it away? Or report it on a Schedule D, but with no capital gain?

[TomYoung]

"So I should report the spread as revenue on a Schedule C."
Yes.

"Then what do I do with the 1099-B issued from the broker? Just file it away? Or report it on a Schedule D, but with no capital gain?"

The latter.  Otherwise the IRS will be inquiring about the "missing" 1099-B at some point.