You use the "Stocks, Mutual Funds, Bonds, Other" interview.
There's two ways to do this.
IF the compensation created by your exercise WAS reported on your W-2 AND you know the correct basis to use for your sale, (NOT your "out of pocket" cost, it's the "per share fair market value" used by your employer to calculate the compensation created by the vesting), THEN you can use the standard, default TurboTax 1099-B entry form. If the security is considered "covered" then enter the (incorrect) basis reported on the 1099-B, but then click on the "I'll enter additional info on my own" blue button. On the next page enter the correct basis in the "Corrected cost basis" box. The correct basis is (number of shares sold) x (correct per share basis, which includes the compensation per share). if the security is considered "noncovered" then simply enter the correct basis as you type in the 1099-B.
IF the compensation created by your exercise WAS NOT reported on your W-2 OR you don't know the correct basis to use, THEN enter the sale exactly as it appears on the 1099-B but then click on the "guide me step by step" blue button and select the "NQSO" interview. If you go this route be sure to work through the ENTIRE "Stocks, Mutual Funds, Bonds, Other" interview until you come to the page showing what TurboTax has calculated as compensation and asking you if the amount was reported on your W-2.
Tom Young
