I exercised ISO in 2016 and sold them in 2017 (<12 months), selling below the exercise FMV. As I understand it, my ordinary income for 2017 regular tax with respect to these stocks should be calculated from my 2017 sell price. However on the 2017 W-2 I received, the income was calculated with the spread on my exercise (using the FMV at the time of exercise in 2016). How do I report/reconcile the difference between the W-2 I received and the actual disqualified disposition ordinary income?
My situation is similar to #3 in the following link:
https://turbotax.intuit.com/tax-tips/investments-and-taxes/incentive-stock-options/L4azWgfwy
with the main difference that my W-2 showed my bargain element as opposed to actual gain.
