Declaring an ISO sale when the company used Rev. Proc. 2002-50

[tonyrock]

The startup I worked for was acquired last year and my company managed the sale in a cashless same-day exercise in accordance with Revenue Procedure 2002-50. 

I received a 3921 and the bargain element was reported on my W2, but due to Rev. Proc. 2002-50, I did not receive a 1099B. 

How should I declare this in Turbotax? I've received conflicting advice. Some saying that, because the company followed Rev. Proc. 2002-50, I do not need to declare anything beyond what's already declared on my W2 as the IRS did not receive any 1099B. Others have told me that I need to always file an adjusted Schedule D, and that the IRS expected this due to the 3921, but TurboTax does not allow me to do this without a 1099B. 

There is very little information out there on declaring ISO sales using Rev. Proc. 2002-50, so any advice on how to do this with TurboTax would be helpful.

[DavidD66 · Accepted solution]

The IRS will not be expecting you to report any transactions regarding the same day exercise and sale of your Incentive Stock Options (ISOs) using Revenue Procedure 2002-50.  The whole point of the procedure is to simply the process and minimize the filing requirements.  If you incurred a loss on the sale due to fess that were charged, you can report the sale on Form 8949 and Schedule D.  The bargain element of the transaction (the income) was reported on your Form W-2.   You report it in TurboTax the same way you report other gains and losses; however, when asked if you received a Form 1099-B, answer no.  Continue and enter the information and details of your transaction.