1099B and options no V on W2s

[NECPA in NEBRASKA]

UPS employee retired and sold all of his options turned into shares. I am confused by the 1099B and supplemental information. Part of the sale is covered and they show cost basis and long term gain on the 1099B as being reported to the IRS, the remainder shows no basis. On the supplemental information, it shows all of the detailed transactions beginning in 1996, the proceeds, cost or other basis gain/loss and ordinary income. It's the ordinary income that is confusing me, I have checked all of the W2s and there is no code V on any of them for the past 10 years. Every one of these is long term, but I can't tell if there was any income ever reported on his W2s. Should I just make an adjustment so that the ordinary income amount is treated as short term? I'm sorry for being so dense. 

 

Thanks!

 

 

[joanmcq]

If they were ISOs, ESPPs, or RSUs, no code V. Some companies reported it in box 14, some didn't; you'd have to go to the paystubs to glean the wage component. The supplementary statement is probably correct.

[NECPA in NEBRASKA]

Thanks, They were from an ESPP. Thank you. He checked the few paystubs that he has remaining and couldn't find any additional information. It is a small amount each year. 

[joanmcq]

The amount that is considered wages in ESPPs is the discount that the shares were purchased for. If held for a certain amount of time (qualified disposition), most if not all of the discount is capital gain, not ordinary income. Income is not going to be recognized, therefor, until the shares were sold.

[NECPA in NEBRASKA]

He did sell all of them a few days after he retired.

[kcjenkins]

I had ONE UPS guy who kept ALL of his paystubs, and ALL of his paperwork on the ESPP.  [Guess why he was one of my favorite clients?]  I found that, although the W-2s did not indicate it, all of the discount that the shares were purchased for was included in his wages, so the whole thing was LTCG.  

[NECPA in NEBRASKA]

Thanks, KC. He did have a lot of additional supplemental forms and I was pretty sure that the other income was charged to his quarter from his purchases.