Should an ISO sale be reported as wages on form W-2?
April 12, 2004
Subject: ISO
Date: Thu, 1 Apr 2004
From: Bernard
Michael,
I am working with a client that exercised ISO’s 2 1/2 years after the grant date and performed a sale of those options on the same day. The gain on the sale is being reported on his W-2 as wages and considered a disqualifying transaction. Is that correct?
Bernard
Baltimore, MD
Answer
Hello Bernard,
Yes. Look at Internal Revenue Code Section 422.
Good luck!
Mike Gray