I cashless exercised Non statutory stock options in August 2024. The gain is included in my W2 Box1 Wages and noted in 12A with code V. The gain is also being reporting as a short term gain by the company's broker causing them to be taxed again. How do I fix? (I believe they should be part of W2 income but don't know how to back it out.) I also had federal and state tax withheld when the cashless exercise was done.
You are supposed to update the cost "Basis" on the 1099-B to be the same the Market price for them on the day of exercise, before any brokerage fees are considered. The 1099-B should be a small loss.
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Read all of the following...but you will end up scrolling down to Example #2
You are supposed to update the cost "Basis" on the 1099-B to be the same the Market price for them on the day of exercise, before any brokerage fees are considered. The 1099-B should be a small loss.
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Read all of the following...but you will end up scrolling down to Example #2
The 1099-B form from the investment company shows the "wrong" cost basis. Do I directly modify that number or do I check the box to modify the cost basis? The latter appears to trigger me having to mail a paper copy of the return to the IRS.
This is the first year Turbotax has not handled this automatically.
The correct way to handle that would be to check the box to enter the correct cost basis. That will result in the original cost basis being reflected on your return with an adjustment to reflect the correct basis, so the IRS can better see what happened.