@GeorgeM777 @pr0
"Yes, for a NQSO, the cost basis is equal to the exercise price, multiplied by the number of shares exercised. "
That is incorrect. The correct cost basis for stock acquired via a NQSO is the sum of the exercise price paid plus the the compensation created by the exercise. In other words, each share of stock has a basis that's the same as the "fair market value" used by the employer to calculate the compensation created by the exercise. The stock broker's 1099-B will report the cost basis as the out of pocket exercise price, but that needs to be adjusted to include the compensation element for income tax purposes.
