NQ stock options exercised and sold in same year. Exercise is covered, sale is not. How to enter?

You are correct.  The cost basis is the amount you paid (discounted price) and the amount included in your income (difference between option price and FMV on the date of the exercise).

Information needed to complete the return:  

• Is this a statutory or non-statutory exercise? (Employer can provide)
  • If the employee is no long employed at the company at the time of exercise it is non-statutory.
• Form 3921 provided by the employer or a substitute document with the necessary information. See the Boxes numbers below.
  1. Date option granted
  2. Date option exercised
  3. Exercise price per share
  4. FMV per share on exercise date
  5. Number of shares transferred

TurboTax Desktop:

1. Personal Income > I'll choose what I work on > Income > Investment Income
2. Select Start or Update next to ISO Exercise and Hold
   1. For TurboTax Online: Less Common Investments and Savings > ISO Exercise and Hold
3. Select 'Yes' I bought shares of ISO stock in 2021 (if bought and sold within the same tax year it would be reported as a normal investment sale from your Form 1099-B- do not select ISO)
4. Select 'Yes or No' I kept the ISO stock through the end of 2021
5. Select the employer and confirm the correct taxpayer is selected
6. Select 'Yes' or 'No' depending on whether your received Form 3921 > Enter the information requested
7. Select 'Done' or add a second transaction if applicable
8. You will see the AMT adjustment if applicable

Thanks, but I need more information.

I am using standalone TurboTax from CD, not the online version. It does not seem to have the prompts you suggest. I start at a page which lists all the sales reported by a given broker. All stock information was downloaded from the broker with $0 cost basis and listed as a sale (which it is, along with the exercise which is not listed separately.)

These are nonqual stock options, not ISOs, hence non-statutory?

I have all the information listed as being in a Form 3921 you mention, but it is presented as "Stock Plan Transactions Supplement" provided also by the broker..

When I enter the information, I can either choose short term covered or short term noncovered, but in practice, it involves a combination of the two. 

No matter which one I chose, it seems to increase my taxes in an unreasonable way. As I understand it, the portion that went on the W-2 is already taxed and the remainder is a loss, so there should be no increase in taxes owed. Where do I go from here?

You need to adjust the cost basis reported on the sale of the stock. After you enter your investment sale information, you will see a screen that says Select any less common adjustments that apply. One of the options will be The cost basis on my statement is incorrect. Check that box and enter the income reported on you W-2 form for the stock as the cost basis, assuming it is listed as $0 on your form 1099-B.

OK, maybe take this one step at a time. On the first screen for the sale, I put in the sale cost basis, which is also the amount listed on the W-2, correct? Then do I enter short term covered, or uncovered?

Ok, the suggestions did not cover all my concerns, but I have figured this out on my own.