I retired last year and had to close my SAR. This was reported on my 42 and a 1099-B. How do I report the 1099-B to prevent this income from being reported twice?

[pamelakayp]

When I retired last year, I had to close my SAR.  This was reported on my W2 (Line 12A as V, Income from exercise of nonstatutory stock options.  State and Federal taxes were with held on this amount.  When I enter the data from the 1099-B I received from the broker firm, the amount of the proceeds is added to my total taxable income.  I seem to be taxed twice on the SAR, once for the total (on the W2 and once on the 1099-B.  Am I doing something incorrectly?  How can I prevent this from happening?

[TomYoung]

Yes, you're doing something wrong.  You are using the wrong basis when you report the sale.

Your basis in the stock is the sum of anything you paid to receive it, probably $0, and the compensation income created by the actual receipt of the stock.  The broker is only required to report to the IRS your out of pocket cost so if you use that number the income is reported twice.

Enter the 1099-B as it reads on the TurboTax default 1099-B entry form but then click on the "I'll enter additional info on my own" blue button.  On the next page enter the correct basis in the "Corrected cost basis" box.

TurboTax will report the sale on Form 8949 "as reported by the broker" but will put an adjustment figure into column (g) of the Form, a code "B" into column (f) of the Form, and the correct amount of gain or loss which includes the adjustment.

Tom Young

NOTE: TURBOTAX CHANGES THE SECURITY SALES INTERVIEW JUST ABOUT EVERY SINGLE YEAR.  THE INSTRUCTIONS ON "HOW TO FIX" THE BASIS REFLECT THE STATE OF THE INTERVIEW FOR TAX YEARS 2016 AND 2017.