Stock Options

[wal23]

Me again. Just received a letter from the IRS claiming I under reported our income for 2010. I cashed out some stock options for a total net payout of $3,873.11. My statement says I had two sets of options reported to the IRS, $6,564 and $6,559, yet I only received a check for
$3,873.11? That is what they worth at the time of cashing out the options. They are now asking me for $3,650 in additional taxes? I am not familiar with stock options. Shouldn't I just be paying tax on the $3,873.11?

[jpg7n16]

That depends on what type of options you received. What did your tax professional say?

Tax Topics - Topic 427 Stock Options

If you're not working on this wIth a tax professional yet, you should be.