TNL US Tax Thread 2013

[Yoshi]

I want to run something by you to make sure I interpreted it correctly, dog$. I had some restricted stock units vest in 2011. They were reported on my 2011 W2 under box 12 with a "V" code. I sold them in 2012. The basis is the value that was reported on the 2011 W2, as opposed to the stock price the day they vested, correct? The way I understand it is that the company sets a max price that creates the basis in this situation.

[dog$]

Correct - the basis is the amount reported under Code V (which is used for nonstautory stock options and is included in the Box 1 and Box 3 W2 values) in addition to anything else you might have paid specifically for those options.

From Publication 525:

Nonstatutory Stock Options
...
Sale of the stock. There are no special income rules for the sale of stock acquired through the exercise of a nonstatutory stock option. Report the sale as explained in the Instructions for Schedule D (Form 1040), Capital Gains and Losses, for the year of the sale. You may receive a Form 1099-B, Proceeds from Broker and Barter Sale Transactions, reporting the sales proceeds.

Your basis in the property you acquire under the option is the amount you pay for it plus any amount you included in income upon grant or exercise of the option.

Your holding period begins as of the date you acquired the option, if it had a readily determinable value, or as of the date you exercised or transferred the option, if it had no readily determinable value.

[Hubbitron]

If you aren't being audited, you're doing it wrong.

[Diff-chan]

I got two 1098 forms due to a refi last year. Can I just add up the totals when I report it on my 1040?

[Yoshi]

Correct - the basis is the amount reported under Code V (which is used for nonstautory stock options and is included in the Box 1 and Box 3 W2 values) in addition to anything else you might have paid specifically for those options.

From Publication 525:

Awesome. That confirms my ability to claim a four digit capital loss instead of a three digit capital gain, and since it was restricted stock, I of course didn't really lose anything, so it's like a bonus from the feds. Thanks!

edit: I think I dicked that up in Uncle Sam's favor in 2010. I'll have to go back and see by how much to see if an amendment is worthwhile.

[dog$]

I got two 1098 forms due to a refi last year. Can I just add up the totals when I report it on my 1040?

Yes, as long as you are the person considered liable for the loans.

I made a call about this to the IRS a few weeks ago in the event that the US Department of Education consolidates a loan - the original holder of the loan received a 98T, but it shown the DOE as the payor of the interest. In this case it would seem that it would be the DOE who was liable, which would prohibit the taxpayer from accounting the interest paid. Without seeing the terms of the refinance I can't say for sure if it's you or the refinancing agency which is considered the ultimate person who holds liability.

As long as you're liable for both, then yes you would just combine both values on the Form 1040 entry.

[MechDeus]

Turns out that when TurboTax was reporting my Pell Grant as untaxed income it might actually be untaxable income, meaning that instead of owing $800 in taxes I might be getting money back. Here's hoping that's true when I go over the paperwork in the next couple days. Glad I didn't finish filing with them yet this year.