Recording sale of ISO without a 1099-B

[jayhp24]

Hi-

I sold a chunk of private company stock this year in a transaction facilitated by a small broker who does not issue 1099-Bs.  I'm struggling with how to properly record the cost basis & adjustment.  When I enter the actual cost basis (# of shares * exercise price), and then a few screens later enter an adjusted cost basis (# of shares * FMV at exercise date), it then displays "$0" as the cost basis on the "Review your stock sale" screen, which seems to inflate my tax liability since I'm paying capital gains on the WHOLE amount.  

If I instead enter the # of shares * FMV at exercise date as the cost basis (box 1e) and then nothing as an adjustment, it shows that as the cost basis on the summary screen, and seems to adjust my tax liability downward accordingly.  I can't tell if this is a bug or whether it's somehow going to adjust this later in an AMT section?

[KrisD15]

If this is a Qualifying Disposition-  (Held at least two years from Grant and at least one year from exercise/purchase)

Since you don't have a 1099-B, there should be no need to adjust the basis. The basis for the sale will be the Strike Price you paid. The profit will be your Long-Term capital gain.

When you EXERCISED  the option, you may have been subject to an AMT adjustment which would have been the amount of the discount.

Look at your Form 6251 for the tax year you exercised the option and Form 3921 from your employer to get this amount.

IF you are again subject to AMT the year you sell, you will adjust the gain on the stock reported on this year's 6251 by using a basis that includes the discount you claimed the year of exercise. So if the AMT adjustment was 2,000 when you exercised the option, the sale of stock reported for AMT will be 2,000 less than your capital gain. 

Use this link for more information or if this was a disqualifying disposition 

[jayhp24]

Hi, thank you so much for the quick reply. A few follow up questions:

* When I sold some stock 2 yrs ago from this same exercise via a broker who *did* give me a 1099-B, the basis they included in box 1e was the FMV at time of exercise, not the exercise price

* When I talked to someone on Turbotax live, they told me to force the basis to be this adjusted basis, because there seemed to be a bug where putting in the box 1e basis and then doing an adjustment was just zero'ing out the basis completely (it wasn't even using the strike price * # of shares)

* Reading this article (https://turbotax.intuit.com/tax-tips/investments-and-taxes/incentive-stock-options/L4azWgfwy), I think I see what you mean though. Is it that the double tax on the spread b/w exercise price & fair market value is taken care of via an AMT adjustment?

[KrisD15]

It means that if in the year you exercised the option, you were subject to AMT, you would have had to claim the spread (discount) for AMT that year.

In the year you sell, the basis is the Strike Price (FMV less Discount) 

HOWEVER

if in the year you sell, you are again subject to AMT, the basis for AMT is just the FMV because you already accounted for the discount the year you exercised the option (for AMT only)