Quote:
Originally Posted by sammyg2
That's kinda sorta what i thought but didn't want to risk looking foolish by being wrong. I know, when has that ever stopped me 
I get a stock grant every year as part of a long term incentive program and it kills me on taxes.
Coincidentally i'm dealing with the IRS right now on an issue relating to it back in '16.
When the bonus matures and is distributed, the company sells off enough shares to cover the taxes and sells the rest to give to me the $$$.
I get it in a payroll check and the amount awarded is handled just like salary.
but the good ole IRS somehow decided that it was NOT already included, and wants me to pay taxes on it, Again.
For some reason they don't recognize that I received only a part of the grant because the rest was sold off .... TO PAY THEM!
And of course they want interest and penalties for under-reporting etc.
So I hired a pro who is crunching numbers and thinks he'll not only get them off my arse, but will put a few grand in my pocket from an amended return because I paid too much.
And that's good. |
Sammy,
How that usually works is the "grant" that matures as you phrase it, is fully included in your W-2 as wage income, subjected to income tax withholding, FICA, medicare, etc. The sale of the stock is typically also reported as income to you on Form 1099-B (gross proceeds from sale of stock). You need to report those gross proceeds on Schedule D in your 1040 regardless of it being a duplicate of income reported on your W-2, but your basis in the stock is equal to the income included on your W-2 and in an immediate sale case you describe, there should be virtually zero gain or loss on the stock sale and therefore no double taxation.
Hope that's helpful.