Deferred income

[mrklaig1]

What is the name of your state (only U.S. law)? Florida

I received 6000 shares of a stock on Jan 3, 2008. It was deferred income when I reached retirement age at a corporation. ( I continued to work). They valued the stock at $53 and you were not allowed to receive cash in lieu of stock.

I deposited the stock in my brokerage account and watched the value go to $2.00 a share in 9 months.

Question, must I pay tax on the $53 x 6000 shares at ordinary income or is there some way to mitigate my tax obligation due to dotads economic situation.

Thanks,

RIPWhat is the name of your state (only U.S. law)?

[JETX]

You need to report the income (value of stock at receipt), then when you sell, report the loss.

[LdiJ]

Originally Posted by mrklaig1

What is the name of your state (only U.S. law)? Florida

I received 6000 shares of a stock on Jan 3, 2008. It was deferred income when I reached retirement age at a corporation. ( I continued to work). They valued the stock at $53 and you were not allowed to receive cash in lieu of stock.

I deposited the stock in my brokerage account and watched the value go to $2.00 a share in 9 months.

Question, must I pay tax on the $53 x 6000 shares at ordinary income or is there some way to mitigate my tax obligation due to dotads economic situation.

Thanks,

RIPWhat is the name of your state (only U.S. law)?

Do I understand that you took the tax out of your retirement account and moved it to a regular brokerage account instead of rolling it over into an IRA?

If so, yes you are going to be paying tax on the value of the stock when you removed it from the retirement account, and then would take a capital loss if you have a loss when you actually sell the stock.

[mrklaig1]

Thanks, the stock was not in an IRA or 401k. It was stock earned and put into a deferred income account.

Is it a capital gain or ordinary income? If ordinary how best to treat the tax loss?

Thanks for your time,

RIP Florida

[LdiJ]

Originally Posted by mrklaig1

Thanks, the stock was not in an IRA or 401k. It was stock earned and put into a deferred income account.

Is it a capital gain or ordinary income? If ordinary how best to treat the tax loss?

Thanks for your time,

RIP Florida

You have two taxable events. It is income when you took possession of the stock. That income should be included in your W2. That is ordinary income.

You don't deal with any stock loss until you actually sell the stock.
If the stock does not rise back up before you do so, then it would be a capital loss and subject to the passive loss rules. If it lost value before you took possession, but after the company "priced" it, then I would suggest that you consult a local tax professional who can do some research for you.

[davew128]

Originally Posted by LdiJ

If the stock does not rise back up before you do so, then it would be a capital loss and subject to the passive loss rules.

You meant capital loss rules, right? Passive loss rules would never come into play on a disposition of property.....

[LdiJ]

Originally Posted by davew128

You meant capital loss rules, right? Passive loss rules would never come into play on a disposition of property.....

Yes, I did mean capital loss rules...fingers and brain were not working together.