I exercised 1000 shares of ISO stock in 2015 and paid taxes on the difference between my strike price ($1/share) and the market value of the shares at the time when I exercised and the company was still private ($5/share).
The company went public and I sold the shares in 2020. No matter what I do, Turbo Tax is calculating my tax based on the strike price of the options ($1 / share), not the 2015 market value of $5/share that I already paid taxes on; I seem to be double taxed.
The only way I can override this is by manually entering my cost basis as $5/share when I input my 1099 information. I've gone through the whole ISO workflow and it's still showing the higher tax #.
Is there a better way to handle this? Has anyone encountered a similar issue?
For illustrative purposes:
Strike price: $1/share
Market Value upon exercise $5/share
Total Shares: 1000
Paid taxes on $4,000 in capital gains in 2015 ($5*1000 - $1*1000) and held the stock.
Company went public and I sold the shares in 2020 for $10/share.
- I expect I should pay taxes on $5,000 of capital gains ($10*1000 - $5*1000)
- Turbo Tax is saying I should pay taxes on $9,000 of capital gains ($10*1000 - $1*1000)
