Reporting SSAR which were cash settled

Forum|Forum|6 years ago
March 11, 2020
1 reply
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Hi,

I'm unclear how to treat sale of SSAR on my investment income. My employer had awarded me SSAR back in 2015 that had vested in 2019. I exercised the SSARs and realized the appreciation through immediate conversion and sale.

Illustrating an example:

Had 100 SSAR priced at $190

Exercised them for $200 to have a gross income of $10/ SSAR and gross earnings of $1,000. Furthermore, I know that my Swiss company's brokerage deducted taxes of ~$350 during sales so remaining $650 got deposited to my account.

In above instance, 1099-B shows that I sold "5 shares" @ $200 each for "gross proceeds" of $1,000. Also, my W-2 shows that amount of $1,000 as "SSAR" in section 14 (The "5 shares" were computed as $1,000/$200 per stock).

Question: How do I report this sale in TurboTax such that I don't pay taxes again. It is not a RSU, its not ISO or NQSO or ESPP. Based on some other posts I saw, I thought I should select RSU but I got stuck since I could figure out how to adjust for taxes paid.

Stocks

ThomasM125

You can report the sale as a normal stock sale.

It sounds like the income was reported on your W-2 form and again on your form 1099-B. In this situation, you need to report both forms as they are listed, but with the 1099-B you will see this screen when you report it in TurboTax:

Highlighted in blue at the bottom, you will see "I'll enter additional information on my own." Click on that option to enable you to report the correct cost basis of the shares sold, which should include the income reported on your W-2 form.

What happened to the taxes paid, are they listed as taxes withheld on your W-2 form or 1099-B?

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SumeetAAuthor

Thanks for quick reply. The taxes paid are not reported on 1099-B. It only shows the "gross proceeds" amount in 1d.

I have to assume that taxes paid were included in my W2 since the brokerage trade confirmation shows that (attaching snapshot - CHF currency since Swiss company). Based on instructions on TurboTax's "additional info" screen I should probably not report these tax amounts since they are not part of 1099-B, correct? Instead I should put the SSAR dollar amount as reported in W2 income (which is almost same amount as the "gross proceeds" in 1099-B) and report that in "corrected cost basis" section? That would essentially net out almost a 0 gain/ loss (ignoring the trade commission costs of the 34.44 CHF you see in attachment - which I could perhaps put in "sales expense" section and make it a perfect 0 gain/ loss).

Also, this was just an illustration since I have about 20 such trades. Guessing I will have to manually calculate the fractional cost basis for each transaction and report them 1 at a time.