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Get your taxes done using TurboTax
When the sale of NQSO are reported on Form 1099-B, the cost basis almost always has to be adjusted. As you pointed out in your question, the exercise of NQSOs resulted in ordinary income which was reported as wages in box 1 of your W-2. Therefore, your cost basis in the stock from your option exercise has a cost basis equal to the amount of income added to your W-2 and reported in Box 12 with Code V. If all shares were sold at the same time, you will only have one transaction which will be the amount reported on your W-2. If you had multiple transactions, you will need to calculate the cost basis per share. The cost basis per share is the total value of the options at the time they were exercised (the amount added to your W-2) divided by the total number of shares exercised. Even if the shares were sold the same day they were exercised, you may have a small gain or loss due to price fluctuations in the stock price. There is a screen in the investment sale section where you indicate that your cost basis needs to be adjusted, and you make an adjustment to the cost basis there.
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