what do i put for stock price?

Question

regarding stocks given by my employer, what do i put as the cost of the stock? zero, or the stock value at the time it was given as a gift?
since i invested no money but later sold the stocks. i know i have to report the amount i sold it for but it also wants to know what the stocks cost.

Answer 1

Employers don't give "gifts" of stocks. Even if the shares were given to you without charge, the value of the shares would have been included in box 1 of your Form W-2 for the year(s) when they were given to you.

Contact your employer to see what your cost basis was.

Answer 2

What you are trying to do is determine the tax basis of the stock you sold. "Basis" generally refers to your purchase price and becomes an important concept when determining the tax liability from the sale of that stock.

I am assuming here that you were given options to purchase the stock, not simply given stock. If what you have were indeed options, there should have been some documentation (via letter from your employer or through the brokerage who executed the sale) that should state what your option price was. As a proxy, you should also be able to determine your option price, i.e. tax basis, by determining what the price of the stock was on the day the options were granted.

If I am incorrect, and the stock was simply given to you in the course of your employment, then your basis would most likely be zero and the proceeds from the sale of the stock will be fully taxable to you.

Answer 3

If you didn't pay for it, then your cost basis is zero.