1099-NEC Non-employee Stock Options - where/how do I link it to Sch. D/8949

Forum|Forum|5 years ago
April 22, 2021
4 replies
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I have a client who was a nonemployee director of a bank. He is no longer there and exercised/cashed in his stock options with the bank. He originally received a W2 with the options, but when we informed the bank as a reminder he was never an employee with them, the reversed the W2 and then issued him a 1099-NEC with the profit of the stock options ($282k.)

How to link the 1099- NEC to the Sch. D/8949, as the only links are for Sch. C, Sch. F, Other Income, or Wages on the 1040? He was not issued a 1099-B, but I have the information to enter the sale of the stock.

Surely this amount doesn't go to a Sch C???

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dkh

Level 15

~~Link it to the Sched C then enter an offsetting expense for same amount with explanation income is stock options being reported on Schedule D Then proceed with your Sch D/8949~~

Ignore this - I obviously didnt know how this should be reported - sorry

Just-Lisa-Now-

Intuit Community Champion

so its all free money?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Just-Lisa-Now-

Intuit Community Champion

Ive never seen this, but thinking it through.....well hes got to pay the tax on the value of the options, just like if it were wages on a W2, right? So it would go on Sch C, then hed use that amount as the basis for the stock sale.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

D

DeveraCAuthor

Level 4

But, you don't pay SS/Medicare on stock options, right? If I only used his cost basis as the expenses, he would have to pay those taxes on his profit. That doesn't seem right.