It all depends.
Whatever income is picked up on your W2 would be the "bargain element." This typically represents the difference iv value between the market price and the exercise at the time the stocks are sold. It is part of your ordinary income and gets taxed at ordinary income rate.
Attached to whatever shows up on your 1099B will be a supplemental schedule which will adjust the cost basis upward to the fmv of the stocks so that you don't end up paying tax a second time. Whatever figure shows up as a sales price for those stocks will appear on that 1099B and be reported accordingly. As such, stock option stock gain does not wash out loss from this other sale
For more details on stock options and their sales implications, see HERE
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