UAL stock to furloughees re: taxes

[AdlerDriver]

Anyone who got the UAUA stock last year and sold it have some gouge on how to deal with the sale for tax purposes?

They took a good chunk of mine and sold it to pay the taxes up front. So, I guess my questions are:

1 - what do you use as the "basis" for the stock. Since we were basically "given" the stock, do we count the whole thing as a gain and make the basis $0?

2 - just looking for some general advice if someone has already cracked the nut on this thing.

Spare me the "see your tax professional" caveats, it's not like I'm not going to sue "crackbaby" or whoever responds on FI.com when I get audited. Just looking to get some opinions of those who may have dealt with this already.

Thanks in advance.

 

[SDF2BUF2MCO]

I am not quite sure of your situation but it sounds like you would have to claim all the "profits" from the sale of your stock. If you didn't pay for any of it, then it is whatever the total dollar figure was. If you paid for any of it, you would only have to claim the difference between what you paid and what you sold.
You stated they sold some of the stock to pay for taxes up front. If that is the case, then you can also claim/get credit for the taxes you paid on it (if indeed they paid the government). Clear as mud? I would think UA would have provided some type of documentation indicating as such but who knows? Good luck.

 

[Pat Fabin]

Adler,

Send you a PM about this...just dealt with it myself.

 

[BiffF15]

Pat,
Could you forward that email to me as well.
Thanks,
Damon
[email protected]

 

[Pat Fabin]

By popular demand, this is the email the MEC R&I folks sent out. If you have returned to UAL, the stock sale proceeds and subsequent taxes you paid have been taken into account via the W-2. You do, however, need to pay taxes on any capital gains from the stock sale (increase in share price over time from when you were issued the stock). Turbotax and other programs can help you compute the basis. You will need the issue date of the stock, issue price, sale date and sale price. This email should help (includes the issue price of the 3 different distributions):

From: MEC Communications
Date: 2/28/2007 1:28:15 PM
To: ualmec-fastread
Subject: MEC R&I Committee Explanation of ComputerShare 1099 Forms



February 28, 2007

TO: ALL UNITED PILOTS

FROM: UAL-MEC RETIREMENT & INSURANCE COMMITTEE

RE: COMPUTERSHARE 1099 EXPLANATION

Pilots who sold all or a portion of any UAUA shares they received in direct distributions throughout 2006 from ComputerShare accounts will be sent a 1099-B form from ComputerShare. They were sent 2/15/2007. Ordinarily, the 1099-B Form is required to be mailed by January 31st but ComputerShare obtained an extension from the IRS. This 1099-B will be in addition to other tax forms you may have received from United covering the distribution itself.

ComputerShare Form “Employee Distribution – Transaction Advice”
Pilots also received, at the time of stock distribution, an informational form from ComputerShare titled, “Employee Distribution – Transaction Advice”.

The taxes referenced on the Transaction Advice form are taxes that were withheld by United prior to a pilot getting shares in ComputerShare. These taxes are included in a pilot’s W-2.

The “Net Shares Due Employee” at the bottom of the Transaction Advice page annotates how many shares went to ComputerShare in 2006. If you sold some or all of these shares in 2006, you will receive a 1099-B form from ComputerShare. If you did not sell any shares in ComputerShare you will not receive a 1099-B from ComputerShare.

Form 1099-B
If a pilot didn’t have a W-9 on record at time of sale with ComputerShare, ComputerShare withheld federal taxes and they are included in Box 4 of the 1099-B. If a pilot had an electronic W-9 on record at time of the sale with ComputerShare, then ComputerShare did not withhold federal taxes and the corresponding 1099-B would reflect no taxes withheld in Box 4. In short, a pilot may or may not have federal taxes withheld on their 1099-B depending on whether or not they had an electronic W-9 on file with ComputerShare at the time of the sale. If you sold shares through ComputerShare in 2006, you can check the accuracy of your 1099-B in either of the following ways:

• Checking that the taxes withheld (if any) on the sales advice form that was attached to your check match Box 4 of the 1099-B.
• Go online at https://www-us.computershare.com/employee. Pilots should enter company code of UALX or company name of UAL to access their login screen. After logging in, go to Transaction History, Details link, and verify that any taxes withheld match Box 4 of your 1099-B.

Form W-2
On your W-2, there are two boxes labeled “Code 30 Taxable Equity” and “Code 48 Taxable Notes”. These two boxes represent the total taxable income from the equity distributions and the note allocation. These amounts:
· Are included in your W-2 wages.
· Have had taxes withheld by UAL.
· Were not subject to union dues.

Capital Gains
You will pay tax only on the capital gains of the shares you sold in ComputerShare, not on the value of the stock sold. The following are the stock prices for computing the basis of your stock in ComputerShare:
· 2/10/06 allocation $31.65
· 5/03/06 allocation $35.51
· 9/22/06 allocation $27.52

The difference between the sale price of your shares, and the cost basis as determined from the appropriate share prices above, determine the gain or loss associated with the sale.

If you do not receive the appropriate 1099-B form contact ComputerShare directly at 1-800-919-7931 or at https://www-us.computershare.com/employee. Also, if you have problems obtaining a 1099-B, please send an email message to the R & I Committee at [email protected] Please indicate “Delayed ComputerShare 1099-B” in the subject line.

Please note: This message is not tax advice and we encourage you to discuss tax matters as applicable with your individual qualified tax professional.

Marty Torres, Chairman​

Jim Bowman, Member​

Fred Greene, Member​

UAL-MEC Retirement & Insurance Committee​

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[BiffF15]

Thanks!!

 

[ualdriver]

www.ualmec.com If you're a UAL guy with UAL specific questions, this is a FAR better forum to get your answers.