I participated in a "cashless exercise" for stock options from a company I used to work with. They generated W2 that covers all income through this sale (sale price - exercise price - transaction fee is in box 1 of W2, no other W2 income since I don't work for them anymore). At the same time, 1099-B has cost basis that reflects only exercise price. Therefore, I need to make some adjustments to avoid double taxation as W2 income + gain via 1099-B.
Question - can I enter information for 1099-B manually with the correct cost basis that will result in Schedule D with (e) containing correct cost basis and no adjustment (g) or 8949 form at all? (this technically means 1099-B statement will have different cost basis vs. what I enter in Schedule D Part I (e) ) So can I skip 8949 at all in this case?
Or is it required to file 8949 and add (g) with an adjustment that will bring my gain to 0 as expected (since W2 covers all income from this stock transaction)?
I'm a bit confused since technically it appears that 8949 instructions suggest that I don't match Exception 1 and have to file 8949 "If all Forms 1099-B (or all substitute statements) you received show basis was reported to the IRS and no correction or adjustment is needed, you may not need to file Form 8949. See Exception 1 under the instructions for line 1, later." But some discussions mention that people sometimes file correct cost basis as is in a simpler method anyway - https://ttlc.intuit.com/community/taxes/discussion/re-when-i-enter-adjusted-cost-basis-from-etrade-should-i-also-check-1099-b-reports-incorrect-cost/01/1729684/highlight/true#M613999
My version: Home and Business 2021, Windows download
No, given the adjustment to cost basis that you need to make, you will have to file Form 8949. You are correct in that your 1099-B will reflect a different cost basis than what you include on your Form 8949; therefore, you need to maintain the documentation supporting your decision to make what you believe is the necessary adjustment. Additionally, Form 8949 is required because your basis was not reported to the IRS.
No, given the adjustment to cost basis that you need to make, you will have to file Form 8949. You are correct in that your 1099-B will reflect a different cost basis than what you include on your Form 8949; therefore, you need to maintain the documentation supporting your decision to make what you believe is the necessary adjustment. Additionally, Form 8949 is required because your basis was not reported to the IRS.