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Sale of NQSO form 1099-B reports no Fed Tax (but tax was withheld) ; TurboTax calulates huge tax

Last year, I have sold via Schwab my former company non-qualified stock options and got 1099-B without federal tax withheld (this field is zero). In my situation, company stock is ordinary income, and as such income from that sale and earned income reported together on the W2. The stock sale info is reported in box 12, code "V". All taxes are reported in W2 as well.
I imported Schwab transactions directly from website, and TT shows huge federal tax.

Right now, it looks like I got double income from stock sale (one included into W2 and another from 1099-B) but paid taxes only on one sale in W2.

But, in fact the taxes were withheld, which is visible on W2 and on the records of individual transactions from Schwab.

How and where could be this discrepancy corrected in Turbo Tax ?

 

Thanks!

 

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2 Replies
DavidD66
Expert Alumni

Sale of NQSO form 1099-B reports no Fed Tax (but tax was withheld) ; TurboTax calulates huge tax

When the sale of NQSO are reported on Form 1099-B, the cost basis almost always has to be adjusted.  As you pointed out in your question, the exercise of NQSOs resulted in ordinary income which was reported as wages in box 1 of your W-2.  Therefore, your cost basis in the stock from your option exercise has a cost basis equal to the amount of income added to your W-2 and reported in Box 12 with Code V.  If all shares were sold at the same time, you will only have one transaction which will be the amount reported on your W-2.  If you had multiple transactions, you will need to calculate the cost basis per share.  The cost basis per share is the total value of the options at the time they were exercised (the amount added to your W-2) divided by the total number of shares exercised.  Even if the shares were sold the same day they were exercised, you may have a small gain or loss due to price fluctuations in the stock price.  There is a screen in the investment sale section where you indicate that your cost basis needs to be adjusted, and you make an adjustment to the cost basis there.  

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Sale of NQSO form 1099-B reports no Fed Tax (but tax was withheld) ; TurboTax calulates huge tax

Thank you, David!

Yes, this works. 

I just wish Turbo Tax would be smarter (more proactive) and based on the amount in box 12 V suggest to select employee stock from the 1099B form(s). Right now a user has to figure it out.

Igor

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