When you exercise and sell NQSOs, the broker does not report the correct stock basis, which is the value of the stock on the date of exercise. As a result, (and as you seem to be aware) you have to adjust the cost basis reported on the 1099-B. If you imported your Form 1099-B, you may not have the option to adjust the cost basis. If that is the case, you will need to delete your Form 1099-B and enter it manually. You will then have the option to adjust the cost basis to reflect the amount that was included in your income.
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