How to avoid paying double tax on stock option exercise in Turbo Tax?

[luowz]

Have exercised NQSOP.  The gain is already reported in W2.  But also reported by broker with cost basis, and in 1099B.  

In Turbo Tax, they are seeming treated as two incomes (one in W2, one in stock category), but the income is identical as one.  How do I make sure NOT to pay double tax on this?  Thanks!

[RichardG · Accepted solution]

The key is to make sure your basis is correct for the stock sale.  Your basis in the stock equals the amount of income included in your wages from exercising the options.  The basis shown on the 1099-B is often incorrect, so you may need to adjust it.  If you sold the shares the same day you exercised the options, you should have little or no gain, and frequently a small loss due to trading expenses.

Please follow this link for more information.  NQSO

[luowz]

Thanks for quick reply.  Yes, I did the same-day covered sale when exercise the NQSOP.  In this case, are you staying the stock option exercise price is "factored" in W-2, while cost-basis to be adjusted in 1099-B is actually the stock price on the day of exercise, but NOT the strike price?