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I'm in the US/New York, preparing to file 2015 federal returns.

I was given an incentive bonus by my employer some years ago, in the form of shares of that employer's stock every year for three years as an incentive. Each of those years, I was given a certain amount of shares of that stock, and was asked whether I wanted to pay taxes by reducing the amount of stock to pay the tax, or to pay a tax from cash/a bank account. I elected to pay the tax by using a portion of the shares instead of paying out-of-pocket.

Very recently, I sold that stock in question, at a loss relative to the stock price when I was given this stock. Given that I already paid taxes on it to begin with, do I need to report this as a capital gain of the amount I received in the sale, a capital loss of the actual loss relative to when I received it and paid taxes on it, or something different?

Please let me know if I need to clarify any info in this question.

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If you received shares as part of a bonus you needed to pay income tax on the dollar valuse of those shares at the time you received them. This income tax is based on the dollar value of the bonus and has nothing to do with the shares.

If you have since sold these shares you will need to report any capital gain or loss you made from their dollar value when you received them. If you made a gain you would need to pay capital gains tax on the profits (if you held them for more than a year you would get a discount on the capital gains tax you have to pay). If you made a loss you can use that capital loss to reduce any other capital gains in that income year, reduce any other income up to $3000 per year, or carry any additional capital loss forward to future income years to reduce any gains or income (up to $3000 per year) you do have in the future.

  • Thanks for answering. I still had an unclarified point. Do I still need to declare the dollar value of the shares at the time of sale as income, or is it only a capital gain/loss from the time when I received them and paid tax on the dollar value at the time? – user36225 Jan 2 '16 at 14:31
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    When you sellthe shares you need to report the date and price you received the shares at and the date and price you sold the shares at, the difference between the two (minus any costs in buying or selling the shares) will give you your capital gain or loss on those shares. – user9822 Jan 2 '16 at 22:59

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