Your W-2 and your Form 1099-B should not report the same gain on the sale of your non-qualified stock options, but often the cost basis reported on the Form 1099-B will be wrong when stock options are involved. In this instance, there is an option to adjust the cost basis reported on the Form 1099-B when you enter the form in TurboTax. It will say "the cost basis is incorrect or missing on my Form 1099-B". You may need to indicate that you are reporting employee stock and that you are entering your sales one by one to see that option. Once you make your cost basis adjustment, it will flow down to form 8949 where your capital gain is reported.
By exercising a non-qualifying stock option, I assume you mean you acquired stock in your company at a discount and it was a non-qualifying stock option as opposed to an incentive stock option. As such, the acquisition of the stock (exercise of the option) would only result in the addition of ordinary income to your wages as reported in box 1 of your W-2, for an amount equal to the discount you received on the purchase of the stock.
As such, there would be no stock sale as reported on a Form 1099-B upon exercise of the option. Since you mention a Form 1099-B was generated I assume there was a sale of stock as well. This may have been initiated by you or the company may have sold some shares to pay into your income tax withholding as reported in box 2 on your W-2 form.
In either case, the cost basis reported on the Form 1099-B may be incorrect and if so it would need to be adjusted. The correct cost basis would be what you paid for the shares that were sold plus the discount reported on your W-2 form in box 1 that is associated with the shares that were sold. This should not result in a negative cost basis to be reported.
The difference between the proceeds reported on the Form 1099-B and what you paid for the shares sold would be your total profit on the sale. The capital gain would be that profit minus the discount reported on your W-2 form.
I suggest you determine how many shares you acquired when you exercised your stock options and divide your discount (reported in box 1 on your W-2) by that number. That will give you the discount per share. Next determine what the shares that you acquired cost (number of shares times the price you paid) and divide that by the number of shares acquired to get the cost of each share. Then, when you enter your Form 1099-B, the correct cost to enter will be the cost per share plus the discount per share times the number of shares sold. You may have received form 3922 reporting the stock acquisition and you can use that to get the numbers necessary for the calculations.
[Edited 2/6/2025 at 9:02 AM PST]
@njenear
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