Box 12 and box 7 questions

[LARRYBOY]

OK, I have a w-2 with a k and v in box 12, do what do i have to do with these if anything?

And I have 1099r with a distirbution code of 6 in box 7. Box 6 has 60% employee contribution of the amount in box 1. It is a total distribution. My software didnt put a tax on it.

Thanks

[Kram BergGold]

code v

Code V tells you he sold some stock options. Chances are good that you need to show the sale on Schedule D.

[BP.]

One of my favorite TTB pages, 16-8, ought to get you pointed in the directions.

[Burke]

OK,
And I have 1099r with a distirbution code of 6 in box 7. Box 6 has 60% employee contribution of the amount in box 1. It is a total distribution. My software didnt put a tax on it.
Thanks

Code 6 is a 1035 exchange usually for an annuity but can be an insurance policy as well.

[FEDUKE404]

Clarify your Code V interpretation

Code V tells you he sold some stock options. Chances are good that you need to show the sale on Schedule D.

I thought Code V was merely an indication of the exercise of some stock options (generating ordinary income to be included in the W2 total).

So far as I know, the mere presence of Code V on a W2 is *not* indicative of the existence of any stock sale.

FE

[LARRYBOY]

1035 exchange

Is any of it taxable if it was all rolled over? Do I need to use another form?

[Gene V]

Code V

Code V
Income from the exercise of non-statutory stock options. This amount is already included as taxable income in Boxes 1, 3, and 5. However, you will still need to report separately the sale of any stock options on Schedule D.

The chances are, your client exercise the option and sold the stock the same day. This way no money is coming out of his pocket. His Schedule D will show a loss (which will be the brokerage commission).

[FEDUKE404]

Cannot infer any stock sale merely by Code V entry on W2

Code V
Income from the exercise of non-statutory stock options. This amount is already included as taxable income in Boxes 1, 3, and 5. However, you will still need to report separately the sale of any stock options on Schedule D.

The chances are, your client exercise the option and sold the stock the same day. This way no money is coming out of his pocket. His Schedule D will show a loss (which will be the brokerage commission).

While this may be true in many cases, the presence of Code V does NOT automatically mean any stock was stock was sold nor that a Schedule D is even necessary.

I do agree that, if a cashless option exercise event occurred (aka "take the money and run"), then it is likely the Schedule D will show a minimal (very!) short-term capital loss, same essentially coming from brokerage expenses incurred for the sale of the stock just acquired. If the intra-day stock price is very volatile, then this generalization may not hold true.

FE