Thanks, Diane. The cost basis on the 1099B shows as $30k (just rounding to make this simple). The Proceeds are showing as $80k, so technically, a capital short-term gain of $50k. The income being reported on the W2, related only to the ISO sale, shows as $50k. I essentially exercised 3,000 ISO shares selling 1,300 of these shares in order to buy the remaining 1,800 to hold. The broker sold just enough to cover the price of buying 1,800 shares for me to hold and the Fed and States taxes due. In addition to the taxes I've already paid on the W2 income of $50k, do I also have to pay Capital Gains tax on the exercise of these options?
