The way you report the sale is to use the correct basis for the sale. The correct basis for the sale, on a per share basis, is the same per share "fair market value" that your employer used to calculate the compensation income reported on the W-2. So if you exercised 100 shares at a price of $5 per share and your employer used a per share fair market value at the exercise date of $20, then the employer reported compensation of ($20 -$5) x 100 = $1,500 and your basis is the sum of what you paid per share plus the compensation per share or $5 + $15 = $20.
So a "same day" sale typically results in a small loss due to selling commissions and fees. The broker is only required to report the "out of pocket" cost for the sale of employer stock so if you simply enter the 1099-B as it reads and don't fix it you end up double reporting income: once as compensation and then again as capital gain.
Enter the 1099-B as it reads on the default 1099-B entry form but then click on the "I'll enter additional info on my own" blue button. On the next page enter the correct basis in the "Corrected cost basis" box. The correct basis is (number of shares sold) x (correct per share basis, which includes the compensation per share)
TurboTax will report the sale on Form 8949 "as reported by the broker" but will put an adjustment figure into column (g) of the Form, a code "B" into column (f) of the Form, and the correct amount of gain or loss which includes the adjustment.
Tom Young
NOTE: TURBOTAX CHANGES THE SECURITY SALES INTERVIEW JUST ABOUT EVERY SINGLE YEAR. THE INSTRUCTIONS ON "HOW TO FIX" THE BASIS REFLECT THE STATE OF THE INTERVIEW FOR TAX YEARS 2016 AND 2017
