This June, Intel will be transferring the administration of employee stock accounts from UBS to eTrade. Intel employees who currently have an account at UBS can choose to keep it, and not have it moved to eTrade. However, all future Intel shares – from RSUs, ESPPs, options, etc – will be deposited in a (new) eTrade account for the employee. Therefore, an Intel employee who chooses to keep their existing account at UBS will end up with two accounts – one at UBS and one at eTrade.
Here are some things to keep in mind when considering whether to transfer your UBS account to eTrade:
Reporting Income from ESPP Share Sales
When ESPP shares are sold, UBS reports any ordinary income resulting from the sale to Intel. Intel then reports the income to the employee on the employee’s W-2. The employee has not had to calculate ordinary income from the sale of ESPP shares. Once Intel transfers the administration of stock accounts to eTrade, UBS may discontinue this reporting services for remaining accounts, requiring the employee to determine and report ordinary income from future ESPP stock sales. It appears that eTrade will provide the same reporting of ordinary income from ESPP stock sales as UBS has historically done. Intel employees may wish to confirm this.
Proving Cost Basis of Shares Sold
A second area of concern for employees with UBS accounts is proving the cost basis of shares sold, to determine capital gains tax owed.
By way of example, an employee’s 2017 1099 statement for their UBS brokerage account will include cost basis information; but this is not reported to the IRS. If shares in the UBS account are subsequently moved to eTrade, the employee will need to retain a copy of UBS statements containing the cost basis information of all individual share lots owned. Employees are encouraged to print and store this “tax lot” information with their other important or valuable documents, as cost basis information is required to accurately compute capital gains tax.
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