You should not be taxed twice and your 1099-B may reflect shares sold to cover your company's tax withholding obligations. What type of incentive stock plan do you have? For example, is it a Employee Stock Purchase Plan (ESPP)? Or is it just a stock incentive plan that allows you to purchase shares in the company below the market price? In either case, the bargain element, which is the discount you received when you exercised the option, is generally taxed as ordinary income. It might be included on your W-2, or it may be up to you to include that income on your tax return.
Because you received a 1099-B reflecting sale proceeds, did you sell the shares you purchased after exercising the option? If you did, the sales proceeds you see on the 1099-B will not be included on your W-2. Thus, you won't be paying tax twice on the sale proceeds if you include them on your tax return.
Depending on the incentive stock plan, companies may be obligated to sell shares to cover their tax withholding obligations. Generally, these "sells to cover" are done at the same price as the option exercise price so there is neither a gain or loss to report. However, to the extent there is a difference in prices, the employee may have a gain or loss to report, and if commissions/fees were charged, the employee will want to include those commissions/fees in their cost basis when determining their gain or loss.
Don C3
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