Client did not pay taxes on 0k stock
I'm a tax advisor with a client who did independent consulting work and was granted stock back in 2016, but never claimed the value of the stock of 0,000 as income in 2016. He never received any tax forms, so did not know he had to.
The client sold all stock in 2018 for 0,000, so he had a 0k capital loss. On the 1099-B it shows a zero basis.
What would you do? Would you amend the 2016 return to show the stock income of 0k and carry that basis forward to 2018, or just report the whole 1099-B in 2018 as a capital gain with no basis? I'm thinking we need to amend 2016, but I'm curious if anyone would handle this differently.
Thank you,
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Amend the 2016 return. Otherwise, he's getting the unfair (and probably illegal) advantage of the 200k loss all at once, rather than having to spread it out with a carryforward.
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