A former company executive exercised their stock options and sold them in 2017, and the company paid them $100,000, while the options were originally purchased for $500 in 2015. For this transaction, the company needs to clarify which tax reporting form should be used. The questioner initially guessed it might be 1099-DIV, but is unsure which box number to fill in.

First, it needs to be clarified that the settlement of stock options typically does not involve Form 1099-DIV. Form 1099-DIV is mainly used to report dividends and capital gain distributions, while stock option transactions fall under equity compensation or disposal of capital assets. According to IRS regulations, when a company pays an executive the option exercise spread or repurchase amount, it usually needs to be reported on Form W-2 (if the individual is an employee) or Form 1099-NEC (if a non-employee), depending on whether the executive is still an employee and the nature of the options.

However, since the executive is a "former executive" and the transaction occurred in 2017, the tax laws applicable at that time need to be considered. If the options are Incentive Stock Options (ISOs) or Nonqualified Stock Options (NSOs), their tax treatment differs. For NSOs, the spread at exercise (i.e., the difference between fair market value and exercise price) is generally reported as ordinary income, and the company must report it on Form W-2 (if an employee) or Form 1099-MISC (if a non-employee). For ISOs, there is generally no taxable income at exercise, but capital gains tax may apply upon sale, and the company typically does not need to report, unless withholding tax is involved.

Given that the questioner mentioned "paid $100,000" and "he bought for $500," this may mean the company repurchased the options or paid a cash settlement. If it is a cash settlement, it may be treated as compensation income and needs to be reported on Form W-2 or 1099-MISC. However, in 2017, Form 1099-MISC was used for non-employee compensation, and it was only changed to 1099-NEC after 2020. Therefore, if the executive has left the company and is a non-employee, Form 1099-MISC (applicable in 2017) may be required.

Additionally, if the transaction is a sale of stock, the company may not need to file any form, unless withholding tax is involved or reporting to state tax agencies is required. However, according to IRS rules, if the company pays more than $600 in compensation, it must file Form 1099-MISC (or 1099-NEC). Nevertheless, stock option exercises are generally not considered "service compensation" unless there is a special arrangement.

For accuracy, it is recommended to consult a tax professional and review IRS forms such as Form 1099-B (for securities transactions) or Form 3921 (for ISO exercises). However, based on the description, the most likely reporting form would be Form 1099-MISC (for 2017) or Form W-2 (if the executive was still an employee at exercise).

In summary, Form 1099-DIV is not applicable in this scenario. The company should verify the type of options, the executive's status, and the nature of the transaction to determine the correct reporting obligation. If uncertain, guidance can be sought from the IRS or a tax advisor.