1099B Stock options

[fliszt]

client had stock option 1997 200 shares Wells Fargo. Sold them in 2006. W2 box 1 $23212. Box 12a code V $10,133. 1099B sold price $67.22/shr total $13,424. Client told me there is no CG. I phoned Wells Fargo 1-800 number and talked to "Stock Option Department Manager" who verified there is no gain. The $10,133 is included in box 1. And the difference of $3,292 was previously included in wage income and tax was paid. Therefore there is no gain/loss on this 1099B.
Sorry folks, but my old gray matter is in the fog. I don't understand how the difference of $3,292 was added to income. If someone could explain I'd appreciate it. Again, my apologies for something I should know and I will certainly get to a seminar this year if options are part of it.

[OldJack]

Well Larry... what is missing here is the fact that the taxpayer did not get a check in the mail for $13,424. Instead, Wells Fargo subtracted the $3,291 and gave the taxpayer the difference. The stock had to be purchased before it could be sold. That purchase was for the same price as the sale price. Someone had to pay to purchase the stock. The employer paid $10,133 and the taxpayer paid $3,291 when Wells Fargo netted it out of the proceeds. Therefore the taxpayers cost is what was added to his W2 plus the amount Wells Fargo kept totaling $13,424 the same as the purchase price.

[fliszt]

Thank you

for your reply. Now I understand. (even though I'm your elder )
Thanks again Jack.
Larry

[Kram BergGold]

Probably a cap loss to deduct

If the taxpayer paid a commision on the sale which is likely, it should be added to the sales price and listed as the cost resulting in a capital loss (short term I would assume) on Schedule D.

[OldJack]

>> even though I'm your elder <<

well... just how old are you Larry?

[fliszt]

Jack, now you

know it's not polite to ask a persons age.
But, I do remeber the B-29s in WWII. Do you?

[OldJack]

Well... you probably are my elder. I do remember WWII and was in grade school at the time. I lived on a military base during the war and rode to school in a semi-truck with a goose-neck military transport trailer as our school bus. I remember the ration coupons and the delight of our family when my civilian dad brought home a big sack of sugar that he got from a generous mess hall cook. Times were tough then.

We are in a different kind of war today and todays youth will most likely not even remember that it happened. It is difficult to believe how so many of our citizens can't understand how important it is to our future that we win this war. Maybe more important than WWII if that is possible. Regardless of your believe, it is a good thing that we have a current President that understands and is willing to take the heat. Now those that disagree can have their turn.

[fliszt]

One never

knows what the future will bring, but we can always try to leave this world in better condition due to our presence. Actually Jack, I was born in 1941 and my dad was in the Army Air Force. Was radio operator on the B29s. I remember a lot of stuff as you pointed out. Today it's a different type of war and I believe Bush is doing what he thinks is right regardless of what public opinion says. I think he takes the heat well. I could never do it.
Take care.
Larry

[fliszt]

P.S. Jack

I see I owe you thanks for making me a senior member.

[OldJack]

I see I owe you thanks for making me a senior member.

Well...I am your elder by 4 years. Its a b ***** getting old but the sex gets better all the time so that makes it worthwhile.

[fliszt]

Uh,

no comment.