Q1a. The IRS only wants income and tax reported. Exercising a stock that has no taxable consequence is not a concern to the IRS.
b. Everything matters when you sell them.
c. I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s, your carryover information, and proof of your basis in your various investments.
You must keep tax records from the time you exercise/purchase until sold/ loss used plus 3 years. It is very easy to lose track of disallowed losses, carryforwards, and basis.
This can be a digital or paper notebook.
Q2. No. All worksheets should be part of your financial notebook.
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