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Intuit
,Created with Sketch.103 helpful votes

How do I adjust the cost basis for an NQSO sale that was also reported on my W-2?

Oftentimes, the cost basis of an NQSO sale reported on a 1099-B doesn't include the stock's discount (compensation). If the compensation was reported on your W-2 (box 12, code V), you could be paying more taxes than you need to.

Here's how to fix that when you enter the sale from your 1099-B form:

  1. On the Tell us about your [company name] 1099-B screen, make sure you've selected I'll enter one sale at a time.
  2. Enter the cost basis (box 1e) from your 1099-B, even if it's wrong. We'll correct that in Step 3.
  3. Select I'll enter additional info on my own button.
  4. On the following screen, enter the actual cost basis in the Corrected cost basis field.
    • For example, if your W-2 has $7,000 in Box 12 with a code V (the correct basis) and your 1099-B shows an incorrect cost basis of $3,000, you'd enter $7,000 in the Corrected cost basis field.
  5. Select Done and the transaction will now reflect the corrected cost basis.

A same-day (cashless) NQSO transaction will usually net out to a small loss, representing the commission and fees associated with the transaction.

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