My ISO income is on my W-2. Do I still need Schedule D?
September 19, 2011
Date: Tue, 8 Feb 2011
I exercised my ISO last year. The amount was included in my W-2. Do I still have to report the stock sale on Schedule D?
Thank you very much.
Date: Feb 11, 2011
Assuming you received Form 1099-B for the stock sale, yes. If you don’t, the IRS will probably issue a notice suggesting you have underreported your income.
Your tax basis for the stock will be the option price paid plus the income reported on Form W-2. (I’m assuming there was no stock swap.) Employers usually give a Statement of Taxable Income for exercised ISOs that details this information.
If you made a same-day exercise and sale, you should have zero income or a small loss.