I exercised stock options, and the gains are included in my W2. Do I still need to enter the exercise information on the 1099-B?

[RichardG]

Yes.  You have two reportable events here.  First, the vesting of the options, which is ordinary income reported on your W-2.  Second, the sale of the stock, which is reported on your Form 1099-B.  The key is to adjust your basis in the stock, if necessary, so that it equals the amount of ordinary income reported on your W-2 for the vesting.  The result will be no gain, or often a small loss due to trading fees, on the subsequent sale.

Please follow this link for more information.  Stock Options

[culver_vanessa]

You should receive a supplemental statement from the broker with an adjusted cost basis. Enter this amount as the “corrected cost basis” under the manual entry of ‘I have additional information’ section. The total gain/loss should be minimal and reflect the same as shown on the supplemental statement.

[taxnovice]

I exercised company stock options last december - it was a simultaneous purchase and sale. The net gain is reported in my W-2 as income. It is also reported in my broker statement 1099-B. Here is the twister  - the 1099-B forms states that this is a short term transaction for which the cost basis is reported to IRS. it has the same figures (net sale price, cost basis and net income) - the final number net income is the same (almost) as the income reported on my W-2. When I import this 1099-B into turbotax this is going to go into schedule D - how can I prevent paying taxes twice on this option exercise?

[HelenC12]

Since the gain on that stock sale was included as income on your W-2, to avoid double taxation:

• You will need to change the stock basis on the date of the sale, to the price on the date of sale.  
• The result is zero gain or a minor loss due to brokers commission/fees.  
• The IRS will expect to see that information on your tax return.  

For additional information, see the TurboTax article: Non-Qualified Stock Options.

[mvondette]

Nonqualified employee stock options are not ordinary income at vesting but rather ordinary income at exercise.  With a cashless exercise, the stock is purchased and simultaneously sold.  Employer would pick up the spread (difference between FMV at sale and exercise price) as ordinary income and also pick up the taxes withheld. Income and tax will be reflected on W-2 from employer.  There should be no gain/loss on the transaction since the purchase/sale was done simultaneously so the basis should be adjusted to reflect $0 gain/loss on the tax return.  The 1099 is often misleading and many end up double paying the tax because of this.