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yitaosun
New Member

Do I have to report both "disqualifying dispositions" W-2 and stock sale 1099-B?

I sold ISOs last year with disqualifying dispositions.  I received both W2 for the disqualifying disposition and 1099-B for the stock sale.  Do I need to report both?  There are a lot of answers regarding how to report the 1099-B in Turbo Tax,  but there isn't any regarding what to do with the W-2?  If I report both, I will be double taxed for a large portion of the ISO sale.

Thanks

1 Reply
MarilynG
Expert Alumni

Do I have to report both "disqualifying dispositions" W-2 and stock sale 1099-B?

The W-2 income is the 'bargain element', or the discount you received on the FMV stock price when you exercised your stock option. 

The 1099-B reports the gain/loss from the sale at cost basis (without the bargain element) to sales price, so both do need to be reported in your return.

The tax consequences have alot to do with the Grant Date/Exercise Date/Sale Date combinations. 

Here's an article that explains in detail:

https://turbotax.intuit.com/tax-tips/investments-and-taxes/incentive-stock-options/L4azWgfwy

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