I received an under-payment notice from the IRS for 2005 yesterday. The issue was my company stock option which I took on 11/07/05. The taxes on the gain were taken out when exersized, and the realized gain appeared on my w-2 under box 12a unedr code "v". Let's say the gain was $5,000 on a stock price of $60 with an option price of $30. The problem is I have discovered that a 1099-B was issued by my company indicating the FULL amount of the deal, let's say $15,000. Now the IRS wants me to pay taxes on the $15,000 - when my only gain was $5,000...and of that $5,000, the taxes were already taken out. Note, these are classified as non-qualified stock options, not ISO's. Thoughts? Am I screwed?
Steve The Bluesman
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