If you acquired employee stock at a discount, the discount should be taxable as ordinary income as opposed to capital gain income typically when you sell the shares. It should be reported as such on your W-2 form as an addition to wages in box 1. When you report the gain on sale of the stock, you need to increase the cost basis of the shares to include the ordinary income from the discount. When you enter the stock sale in TurboTax, you have an option to indicate that it is employee stock and the program will help you determine the correct amounts to enter.
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