A Guide to Employee Stock Options and Tax Reporting Forms

Schedule D is used to report capital gains and losses. Capital gains are the profit you make on your investments. A capital loss is incurred when your investment losses value. You must report stock option trades along with other investments on Schedule D of Form A Schedule D is a worksheet consisting of six columns. Report each stock option on a separate row. Refer to your brokerage account statement for a description of the stock option.

The description must include the company name, type, number of traded options and expiration date.

Include the option description in Column A, Part I for short-term trades closed within one year. Options open for more than a year are considered long-term. Report long-term stock option descriptions on Part II. Report the date you purchased the option in Column B.

Ask an Expert: Form and Schedule D Data Entry in ProSeries - Accountants Community

In Column C, write the date the option was traded. Enter the sale price of the option in Column D. In Column E, report the original cost you paid for the option. Remember to subtract commission fees from the sales price and add them to your original cost.

State the capital gain or loss on Column F. Place a loss inside brackets to indicate a negative number.

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Skip to main content. Schedule D Description How to Report Options on Schedule D How Do I Report Reinvested Stock on Schedule D? Step 1 Refer to your brokerage account statement for a description of the stock option. Step 2 Include the option description in Column A, Part I for short-term trades closed within one year.

Step 3 Report the date you purchased the option in Column B. Step 4 Enter the sale price of the option in Column D. Step 5 Subtract Column E from Column D to determine the gain or loss. Step 6 State the capital gain or loss on Column F. Step 7 Repeat the process for each stock option.

Tip For expired options, enter the expiration date in Column C and write "Expired" in Column D. References 4 The Street: Reporting Options Trades for Taxes Investor Place: Taxes on Option Trades IRS: Instructions for Schedule D - Form IRS: Topic - Checklist of Common Errors When Preparing Your Tax Return.

Schedule D Capital Gains and Losses. About the Author Jeannine Mancini, a Florida native, has been writing business and personal finance articles since Recommended Articles IRS Schedule D Instructions How to Claim Losses on Stocks How to Fill Out a Schedule D Tax Worksheet Is Schedule D the Same for a and a ? Related Articles Can You Mark Stock Purchased at Various Times on a Schedule D? Money Sense E-newsletter Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more.

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How to Enter Option Trade Information on a Schedule D | Finance - Zacks

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