How is compensation from the exercise of nonstatutory stock options reported on
ID: 2602396 • Letter: H
Question
How is compensation from the exercise of nonstatutory stock options reported on Form W-2 if compensation is NOT recognized on the date of the grant? The spread
between the:
1) Grant price of the stock over the fair market value at the time of vesting is shown as a "V" in box 12.
2) Grant price of the stock over the exercise price at the time of vesting is shown as a "V" in box 12.
3) Fair market value of the stock over the exercise price at the time of exercise is shown as a "V" in box 12.
4) Grant price of the stock over the exercise price at the time of exercise is shown as a "V" in box 12.
Explanation / Answer
Answer: Grant price of the stock over the exercise price at the time of exercise is shown as a "V" in box 12.
Explanation: if compensation is NOT recognized on the date of the grant then the spread
between the exercise price and the grant price at the time of exercise is shown in box 12 with a code "V."