Box 14 is just informational so I think you still need to file a Schedule D and just ignore Box 14 on your W-2. Now do you have an entry in box 12 of your W-2 for code 'V'?

No, I don't think so. And I do suspect you're right about Box 14 because I took it out, and it didn't change my tax owed.

What's confusing me is the fact that I owed anything at all before I did the Schedule D. I'm fairly certain I overwithhold, and I didn't change my withholding from the year before, when I got a refund. And my salary was not significantly higher in 2007 than it was in 2006.

You should be taxed on the cost basis at some point, but not twice -- i.e., not at grant AND sale, but one or the other.

I think I'm only taxed at sale. I didn't do anything special last year, when I held stock options but hadn't cashed them out.

Maybe you can contact your HR or payroll person/people and ask if your stock option income was of the non qualifying dispensation type and was therefore included in your W-2 income.

When I have that type of income I actually write a note on my schedule D that the transactions on that 1099 were cashless stock option exercises and they are reported (in my case) in box 12 code 'V'.

I had to deal with the IRS on this issue a few years ago.

If you bought and held, then I'm clueless if there is any tax on the granting of options.

I didn't hold. I sold the same day.

I didn't hold. I sold the same day.

Wouldn't you be taxed on the cost of the options as income, and then the "profit" (i.e., Phase 3) as capital gains? Also, isn't there some rule about short- vs. long-term with stocks?

Because of this?

t cries

But it wasn't my fault!

Thanks for the links, msbelle.

I'm having some feminist rage today.

I don't know. I don't think noting that type of income in W-2 box 12 code 'V' is mandatory, so maybe contacting an HR person to clear things up might help. Somebody should know if that income was included.

CNN is running a really weird piece about a polygamist group that was raided in the 50s, interviewing a bunch of women who were children at the time. The whole thing is being portrayed as some family tragedy, all noble fathers sneaking back to see their wives and the women hiding new pregnancies from the big bad authorities (since part of the men's release from prison was a promise not to, you know, keep it up. Iit was many years before some of the families were reunited." Which, yes, I'm sure that's hard and all, but it's a deeply strange perspective when not contrasted with any other view of the situation.

Wouldn't you be taxed on the cost of the options as income, and then the "profit" (i.e., Phase 3) as capital gains?

You still have to buy the options, you just get a better price if the stock price increased since the grant. I have no idea however if there is any tax on the current price - strike price but I don't think there is, but I don't really know for sure. I think you just pay on the sale price - purchase price - comission at sale time.

A same day cashless transaction can get rolled into regular income however and that's the only way I've ever done it.

The idea is that once you put is down it will stop swirling around in your head and causing anxiety.

This actually has worked for me since I started in January. I keep a thin moleskine notebook and I just write stuff down. It is so much LESS anxiety producing than to perseverate on the same 18 things I need to do.

And, yet, things still fall through the cracks.