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New Member

Nonqualified Stock Options

I received a combined 1099-B statement.  In the statement, it does not distinguish between regular stock sales and a same day cashless sale of options.  I am trying to enter the information in the 1099-B section.  It asks if it is through the sale of employee stock which I believe it is (non qualified stock option).  When I try to enter the Sale Information, it does not allow me to enter the selling price per share.  This results in a sale reflecting total proceeds of zero.  It then allows me to enter the exercise information but still show a cost basis of $0.00.  I also paid withholding on this transaction which shows up in my W-2.  Am I missing something?  Thanks
3 Replies
Expert Alumni

Nonqualified Stock Options

What typically happens with employee stock options is ordinary income is reported on your W-2 to account for the discount you received when you paid less for the stock than it was being traded for. Then, you get a form 1099-B that lists the sale proceeds and the cost basis equal to what you paid for the stock.


Since what you paid for the stock was less than the market value, and the difference is reported on your W-2 form, the cost listed on the form 1099-B is understated. So, you have to change the cost basis reported on the 1099-B form when you report it in TurboTax.


When you enter the form 1099-B in TurboTax, you should enter the sales and cost basis as listed on the form, then you will see underneath the entry boxes  I need to enter amounts form box 1f, box 1g, or other adjustments. You can enter an addition to your cost basis equal to the income reported on your W-2 form to lower the gain on sale accordingly and use Code B for the adjustment code.


If you sold your shares as soon as you acquired them, then the capital gain will probably be minimal.

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New Member

Nonqualified Stock Options

how can I report Nonqualified stock option in (NJ) Stats Tax - I don't see any adjustment in Turbotax or any option in state tax for turbotax?

Level 9

Nonqualified Stock Options

Here is a TurboTax article about Nonqualified stock options and another article about how to enter them on your tax return.  When you enter the information for your federal return, it carries over to the state.

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