U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 02-17-2011, 05:18 AM
 
1,339 posts, read 2,970,063 times
Reputation: 2220

Advertisements

Excuse the double posting, but I wasn't sure of the correct forum for asking tax-related questions. Mod, please delete if this thread is in the wrong forum.

Hi:

In 2003, I was the recipient of a Rabbi Trust or Non-Qualified Deferred Compensation Plan (NQPD) from my company. I decided to go with 5, 6 and 7-years vesting schedule so by year 7 (2010), all the shares would be vested. I also chose to pay my taxes by withholding stock whenever the shares would vest.

Thus, every 5, 6 and 7th year, I got a letter saying
"Your distribution was issued to your stock account. It will be treated as ordinary income for calendar year 200X, and a W-2 will be issued to you in January. From a taxation perspective, the IRS requires witholding on distributions to employees from a non-qualified deferred compensation plan. A stock-for-tax transaction occurred to cover the required witholding amount, and you were issued the remaining shares". Thus, I was paying Federal tax, State tax and FICA/Other witholdings using a portion of my vested shares.

In December 2010, I sold all the shares that were vested in my Rabbi Trust or Non-Qualified Deferred Compensation Plan (NQPD) so the balance is now zero shares.

My 2010 W-2 does not have code Z in box 12 (it was absent even in years 5 and 6), and even box 11 is empty (it was empty even in years 5 and 6) but the amount was included in box 1 as ordinary income. The 1099-B that I received does not have such details either. All it has is the date of sale and the gross proceeds. Box 6 "classes of stock exchanged" box is empty. Note that in addition to shares from my Rabbi Trust or Non-Qualified Deferred Compensation Plan (NQPD), I also sold some shares that were Nonqualified Stock Options (NSO) and Restricted Awards (RA).

I am using TurboTax to file my taxes. Entering the information for shares that were Nonqualified Stock Options (NSO) and Restricted Awards (RA) is straightforward. However, I am stuck for the sale of shares from my Rabbi Trust or Non-Qualified Deferred Compensation Plan (NQPD). Turbo Tax is asking me if this sale belonged to any of the following categories:

Most Common Investments:
- Stock (excluding employee stock)
- Mutual fund
- Bond

Employee Stock Plans:
- Employee stock purchase plan (ESPP)
- Nonqualified stock option plan (NQSO)
- Incentive stock option plan (ISO)
- Restricted stock awards (RS)
- Restricted stock units (RSU)

I am not sure which option to select. Can you provide some guidance?

Thanks,
K
Reply With Quote Quick reply to this message

Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top