Your company will report, as ordinary income, the difference between the stock market price and your option price. Your broker should report the difference between the price at which you sold the stock and the market price at which you bought the stock. In a single-day cashless transaction, you should have ordinary income reported and no gains, or a very small gain, from a short-term sale. Sometimes the broker does not know that you are having a stock option so they will report the cost at which you bought the stock, the option price. In Turbotax you can adjust the basis to reflect the stock market price on the day you bought the shares. Note, sometimes there is a supplemental schedule in the 1099-B that will provide the true cost to be reported.
