You will want to adjust the cost basis on Form 1099-B to reflect the value of the stock when you were able to exercise your option as @Whoislike said. If these were ISOs, you may have gotten Form 3921 from your employer or you may find the adjusted cost basis in the supplemental information on your Form 1099-B. If you can't find the correct cost basis anywhere, TurboTax will help you calculate it by determining the fair market value per share when it exercised and how many shares you received. If you sold them right away, the gain or loss should be minimal.
To enter it in TurboTax:
- In the Federal > Income & Expenses > Investment Income section of your return, click Start/Revisit next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
- Answer Yes and then select stocks. Import or enter your transactions manually.
- For the employer stock transactions, make sure to select Yes to Do these sales include any employee stock?
- Enter the transactions as they appear on the 1099-B with the type of employer stock selected as the type of investment.
- If the basis reported on the 1099-B is not correct, you will be able to adjust it to match the supplemental information provided under Adjust your cost basis to ensure your best outcome after you enter the stock sale. If you can't find your adjusted cost basis in your tax documents, TurboTax will help you calculate it if you select I can't find it and need help.
