Sale of nonq options, basis?

Haley

I am not a robot
I'm having a moment of self doubt on my basis because Etrade shows something else (not reported to IRS).

All shares held more than 2 years since options were exercised.

Etrade shows as the basis the price shares were acquired at. I thought basis would be based on market price day prior to exercise as the difference was taxed as ordinary income at the time of exercise. Why Etrade, why?

Market price - discount = price paid
Discount amount taxable as ordinary income at time of exercise
Price paid + amount taxed as income = basis
 

Matt

Administrator
Staff member
I'm having a moment of self doubt on my basis because Etrade shows something else (not reported to IRS).

All shares held more than 2 years since options were exercised.

Etrade shows as the basis the price shares were acquired at. I thought basis would be based on market price day prior to exercise as the difference was taxed as ordinary income at the time of exercise. Why Etrade, why?

Market price - discount = price paid
Discount amount taxable as ordinary income at time of exercise
Price paid + amount taxed as income = basis
Your analysis seems correct. You're going to have to ask etrade what they are doing.
 

Haley

I am not a robot
Thanks

Etrade mostly leaves us alone, which is why I haven't jumped ship on them. So annoying to get constant calls.

Fidelity is getting a new account by March 31st, actually two, one each. Just need to decide between American or United (or Delta, but I'm pretty sure not Delta).

Looking around for other bonuses. I'll do one more. I don't like too many to keep track of.
 
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