You may be running into a situation where you have ordinary income associated with the sale of incentive stock options because you didn't hold the stock for at least one year from the date you purchased it and two years from the date you where granted the option to acquire it. I so, ordinary income applies and is typically reported on your W-2 form for the discount associated with the stock purchase. This may be duplicated when you report the sale of the stock, since the Form 1099-B reporting the sale may not report the correct cost basis. If so, you need to adjust the cost basis when you report the Form 1099-B.
You will receive a Form 1099-B which will report the sale of your employee stock. Most likely, the cost basis on that form will be wrong as it may not include the discount you received associated with you receiving the stock for less than fair value. That discount will be reflected on your W-2 form as wages in box 1. There may be an entry in line 14 telling you what the amount the discount is.
If you divide the discount amount by the number of shares you received you know what the discount amount per share is. If you multiply that by the number of shares sold you will know what the discount amount is that you may need to add to the cost basis of the stock sale reported on your Form 1099-B.
When you enter the Form 1099-B in TurboTax, there will be a screen where you enter the sales proceeds and cost basis and you will see an option to indicate that the cost basis is incorrect or missing on the Form 1099-B. Check that box and on another screen, you can enter the correct cost basis or request that TurboTax assist you in determining what the correct cost basis is.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
