Non-employee stock options

Forum|Forum|1 year ago
July 13, 2024
2 replies
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I have had non-qualified stock options. I exercised them and I am holding the stocks (which I did not sale). I am trying to enter the relevant information in step-by-step process in my TT under "Investment Income". However, it has only one option for "ISO Exercise and Hold" and does not give me to enter my Non-ISO transaction.

Why this is missing?

I went to Forms format. It shows "Exercise of Stock Options" worksheet and this shows both alternative ISO and Non-ISO. Now I manually modified the worksheet and entered the information on Federal Sch 1, line 8k.

Am I doing something wrong or missing something? PLEASE HELP.

July 13, 2024

TurboTax Home & Biz Windows

Best answer by SteamTrain

@mmvasu

If truly non-qualified stock options?

Read and bookmark the following FAQ: So far you a e in situation #1....where the compensation element "should" be reported on your employers W-2 for whichever tax year you exercised the option. Thus the gain (even if not sold yet) should be just on your W-2

Thus:

No stock sales reported yet, until you sell any/all of them, then you get into situations #3 or #4, and the basis will be the full market value of the stock on the day you originally exercised the NQSO options:

Non-Qualified Stock Options - TurboTax Tax Tips & Videos (intuit.com)

(Bookmark the above help page for future reference)

taxlady28

If you did not sell then nothing to report. Exercise options means selling the shares.

SteamTrainAnswer

Employee

@mmvasu

If truly non-qualified stock options?

Thus:

Non-Qualified Stock Options - TurboTax Tax Tips & Videos (intuit.com)

(Bookmark the above help page for future reference)

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

TomD8

Employee

@mmvasu ==

As @SteamTrain stated, the compensation element of the exercise of your NQSO's would be reported on your W-2 if you were an employee of the company. If you were granted the options as a non-employee, you should have received a 1099-NEC.

When you exercise an option and do not sell, the difference between the FMV at exercise and the grant price is taxed as ordinary income and is subject to federal, state, and local income tax in addition to payroll taxes.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

mmvasuAuthor

Thank you for your reply. I appreciate this explanation.

However, my problem is that TurboTax does NOT provide a data entry for Non-ISO. In the step-by-step process, TT only opens ISO input screen. There is no screen for Non-ISO input. Can you help on how to do the entry?