Taxes w/h to pay taxes on options

[DTS]

Client has stock options that have been included in his income. The company w/h shares of his options to pay the taxes, so he rec'd "net" shares and value. When a company takes a portion of these stocks that were granted (not a purchase plan) to the emp’ee and uses them to pay the taxes for the emp’ee, is that considered part of the basis?

At first, I thought so, but after thinking about this, I don't think so. If anything, should be used to reduce basis since t/p did not pay for the "net" shs of stock. Can you tell me the proper way to address this on the tax return? Friends and I have researched this and nothing to be found that will answer this.

Thank you,

D

[David1980]

I think your assessment would be correct. If $100 was included in income, $80 went to the stocks, and $20 was included as tax withheld on the W-2 their basis would only be $80.

[DTS]

Mistake on this post

Sorry, I went delete this post, but accidently posted. I need more info so that this post is more accurate for anyone to answer correctly.

I will get that info and post, again!

Since it's up, the title of my post should read "Shares of stock w/h to pay taxes." This is what I want to find out, whether the client sold the shs to pay the tax or the company did. There is a third party involved with this.

D