Tax question, 1099 reported sales differs when option are exercised

Discussion in 'Taxes and Accounting' started by stock777, Jul 5, 2008.

  1. So IB reports on its 1099 total sales in box 2 without including the cost of an exercised PUT.

    Their Sched D breakout does show this amount (the cost of the PUT) on a line at the bottom and they instruct you to report the gross total sales with that amount subtracted, so the Sched D adds up correctly.

    As a line item, you report the total sales price of your PUT minus the cost of the PUT, so this makes sense. There is no other reporting of the option transaction for tax purposes, so it does not show up in the Sched D at all.


    The question is, since the amount on the 1099 will be HIGHER than the amount you report as total sales, do any of you bother to notate the entry so the IRS doesn't question the discrepancy? Or it that not needed?