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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?