I excercised a stock option last year. It was reported on my W-2 form. The IRS just sent me a letter. They want to tax me on the gross amount, not the net amount reported on the W-2. Which is correct?
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Stock Options
You are not providing all of the details. Why did IRS send you a letter? Did you have unreported income? Did you sell the options, receive a 1099-B, but not report the sale on Schedule D? -
Stock Options
Usually options are bought and sold in the same day. Your company issues a 1099B for the amount sold. You need to report these transactions on a schedule D, generally, showing the same cost and sell. It might even be a slight loss if you had to pay some commissions. You, apparently, thought the transaction was done when they added the discount amount to your W-2.Comment
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