I have Nonqualified stock options that I exercised (sell and hold) or "sell to cover the cost of acquiring shares to hold. Here's my predicament. If i attempt to do a schwab 1099 B automatic sync with TurboTax it does not take into consideration the "adjusted cost basis" since Non qualified stock is characterized as "ordinary income" the 1099 B doesn't take into consideration that there were already tax withholdings which are in my W2. I journal entried all my Short Term Transactions which basis is reported to the IRS (form 8949). I checked the box in turbo tax that the cost basis was incorrect since it didn't include "adjusted cost basis". When I put the adjusted cost basis which I get from Schwab's Total Equity Activity Statement, which includes award date, award price, sale price and most importantly the adjust cost basis.
Here's my question. After I input the adjusted cost basis it makes my situation with a pretty sizable capital loss? This is where I am confused. I know you can only write off $3k/year on a capital loss but my biggest question is why its showing a capital loss.
