Question

NSO Stock put in Box 14 of W2

Forum|Forum|4 years ago
April 5, 2022
1 reply
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Hi, I have a question regarding the NSO Stock item in Box 14 of a previous W2 (e.g., the amount was $1000). I tried to contact HR of the company that issued the W2 but no response. I am just wondering whether anyone has a similar experience and understands whether the amount of NSO Stock item ($1000) in Box 14 of W2 is included in Box 1 of W2. If we paid $2000 to exercise the NSOs and sold the NSO two years later, should $1000 be added to $2000 (i.e., $3000) as the cost basis? Thanks in advance to anyone who responds.

T

ThomasM125

The $1,000 listed in box 14 on your W-2 form reports the income included in the line 1 amount that represents the discount on the stock you acquired. So, yes, the box 14 amount is added to your wage income and is included in line 1 on your W-2.

The cost basis of the stock would be what you paid for it plus the income reported on your W-2 form. What happens is you receive a stock worth, as an example, $3,000 but at a price of $2,000. So, the discount of $1,000 in this example is reported as ordinary income on your W-2 form. So, your basis is what you paid, $2,000 in this example, plus what you got taxed on from the W-2 amount in box 14 which was added to your income.

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