Yes, you're getting double taxed for the sale because you are using the wrong basis. Brokers only have to report your out of pocket cost for this sale. Since your out of pocket cost is $0 you're double reporting the income: once as compensation and then again as "gain".
Enter the 1099-B exactly as it reads and then click the blue "I'll enter additional info on my own" button. On the next page enter the correct basis in the "Corrected cost basis" box. The correct basis is: (# of shares sold) x (per share basis for that lot.) Your per share basis for any particular lot of stock is the same as the per share fair market value used by your employer to calculate the compensation created by that lot vesting.
Tom Young
(SINCE THE DEVELOPERS CHANGE THE SECURITY SALE INTERVIEW EVERY SINGLE YEAR I'LL NOTE THAT THIS ANSWER'S DIRECTIONS ON HOW TO CORRECT THE BASIS FOR THE SALE PERTAINS TO THE 2016 INCOME TAX YEAR. I'M SURE THAT THE INTERVIEW WILL CHANGE IN THE YEARS AFTER THAT.)
