Hello,
I have some ISOs that were granted to me in 2018, exercised in 2023, but sold less than a year later in 2024. My understanding is that this makes them a disqualifying disposition. My employer did not include this on my W-2. I have other ISOs that were same day exercise/sales, which they DID include in Box 1 and 14 of my W-2.
I am unclear as to how I should be reporting the ISOs that were not included on my W-2. Here is what my 1099-B shows for the ISOs that were not included on my W-2:
Proceeds: $4500
Cost Basis: $552
Gain: $3948
ISO Details
Shares: 300
Exercise Price: $1.84 * 300 shares = $552
FMV on Exercise Date: $10.25 * 300 shares = $3075
Sale Price: $15 * 300 shares = $4500
Bargain Element: $3075 - $552 = $2523
Regular Gain: $4500 - $552 = $3948
1) Should the bargain element of $2523 be on my W-2? I'm wondering if I need to request a corrected W-2.
2) If the answer to the above is no, can I simply report the bargain element of $2523 as compensation through the "Other Reportable Income" screen in TurboTax? I tested this in TurboTax, and it puts the value on line 1h of form 1040.
3) Would I then adjust my 1099-B cost basis by $2523, resulting in a short term capital gain of $1425 (proceeds - exercise - bargain element)? Trying to make sure my approach to reporting this is correct. Thanks all.
