Do I need to file IRS Form 4852 Substitute for Form W-2...?

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TheBezzle
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Do I need to file IRS Form 4852 Substitute for Form W-2...?

Post by TheBezzle »

Over a 20+ year period, I acquired Megacorp stock thru an ESPP. Megacorp used three different brokerages to handle the shares, which I eventually consolidated at Fidelity, the last of the three to administer the ESPP. When I've sold shares, I got a W-2 representing the part of the gain that's taxed at ordinary income rates, and I adjusted the basis from Fidelity's 1099 accordingly. Last year though, I sold three lots from 2003-2004, and I did not get a W-2. I contacted the ESPP department at Megacorp by email, and was told: "We do not track shares older than 2007 when we switched platforms, therefore we are unaware when you sold the shares and cannot report income in a w-2."

I use Turbotax, and I could just update the Megacorp W-2 that it remembers from the prior year. But should I check the box for Substitute form - I didn't get a W-2..., and have Turbotax include the Form 4852?
fabdog
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Re: Do I need to file IRS Form 4852 Substitute for Form W-2...?

Post by fabdog »

There's no W2 for shares that old... the "Qualifying disposition" period is 1 year from purchase date and at least 2 years after the offering date. Qualifying dispositions are what drives the income from the delta between share price and purchase price to your W2

You just have standard capital gains on whatever the sale price is above what you paid for those shares

Mike
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TheBezzle
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Re: Do I need to file IRS Form 4852 Substitute for Form W-2...?

Post by TheBezzle »

Well, I for sure got a 2019 W-2 for shares sold 2019-03-19 and acquired 2017-03-31 (so less than 2 years). But offering date I believe was 6 months prior (ex-employer called it subscription date).
fabdog
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Re: Do I need to file IRS Form 4852 Substitute for Form W-2...?

Post by fabdog »

Companies are very good about tracking this (they have to be or else they'll be in trouble). At my former employer you had an electronic survey from Computershare every year that asked for the status of all your ESPP shares within the window, and if any had been sold they got added to your W2

In most places the subscription date is not what they'll use for the offering date.

So I believe your company has reported both sales correctly to you (your 2019 sale generated income on a W2) and your sale of shares from 2003/2004 did not... just report as capital gains vs your original purchase price

Mike
Asyouwish
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Re: Do I need to file IRS Form 4852 Substitute for Form W-2...?

Post by Asyouwish »

Just make sure the sales are properly reported on the Form 8949 and Schedule D. The IRS would only need a W-2 if you were reporting wages from box 1 and federal withholding. Without a W-2, don’t worry about it. It’s the 1099-B that becomes the issue for reporting.
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Re: Do I need to file IRS Form 4852 Substitute for Form W-2...?

Post by TheBezzle »

fabdog wrote: Mon Jun 14, 2021 1:05 pm You just have standard capital gains on whatever the sale price is above what you paid for those shares
Intuit says https://turbotax.intuit.com/tax-tips/in ... /L8NgMFpFX that the "bargain element" is always ordinary income, never capital gains, although the employer is not always obligated to report it. As a good Boglehead, I would report it as ordinary income, even if there is no W-2.

Also found this thread https://ttlc.intuit.com/community/taxes ... 00/1331925. I ended up putting it on Schedule 1, Part I, Line 8 because that allowed a lengthy explanation. I will need the explanation (and this Bogleheads thread) next year when I'm trying to remember what I did!
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