Should proceeds from stock sales appear on w2 and then also a 1099-B?

[AbrahamT]

It all depends.

Whatever income is picked up on your W2 would be the "bargain element." This typically represents the difference iv value between the market price and the exercise at the time the stocks are sold. It is part of your ordinary income and gets taxed at ordinary income rate.

Attached to whatever shows up on your 1099B will be a supplemental schedule which will adjust the cost basis upward to the fmv of the stocks so that you don't end up paying tax a second time. Whatever figure shows up as a sales price for those stocks will appear on that 1099B and be reported accordingly. As such, stock option stock gain does not wash out loss from this other sale

For more details on stock options and their sales implications, see HERE

[mschoenfelder]

" The key to avoiding double taxation is to add the ordinary income shown on your W-2 for the shares vesting to your basis for the subsequent sale.  "

Add where?  As soon as I entered by 1099-B, the double taxation showed up.  I tried to use the "I need to adjust my total cost basis", but then it wanted an adjustment code.  None of those seemed to indicate "already reported on W-2".  The referenced ISO page talked about Schedule D.  Great.  That makes sense, but my TurboTax didn't prepare a schedule D for me.

[Mike9241]

form 8949 instructions

• If this transaction is reported on a Part I (of form 1099-B) with box B checked at the top or if this transaction is reported on a Part II (of form 1099-B) with box E checked at the top, enter the correct basis in column (e), and enter -0- in column (g) and enter code B 
• If this transaction is reported on a Part I (of form 1099-B) with box A checked at the top or if this transaction is reported on a Part II (of form 1099-B) with box D checked at the top, enter the basis shown on Form 1099-B in column (e), even though that basis is incorrect. Correct the error by entering an adjustment in column (g). and enter code B 

code B covers all situations where the cost basis reported is incorrect. there is no code for "already reported on w-2". 

the numbers from form 8949 will flow to schedule D, either the short term or long-term section, and that form will be included in your return. it's required in this situation. 

[mschoenfelder]

Thank you very much @Mike9241 for the prompt answer.  That exactly answers my question (and I am sure will do the same for many others).

This was a same-day sale of ISO.

My 1099-B does have a value for "Cost or other basis".  In my opinion the cost basis is exactly right since that was the cost basis.  It feels as if I am twiddling the numbers to make everything come out correctly.  Maybe this is just a case of the forms not catching up to requirements for reporting such income on W-2.

I also wish the TurboTax UI would label their input fields with the IRS form line/column/box numbers (where there is a correspondence).  That way when people give answers in terms of line/column/box, I can know where to put the numbers on the UI.  In this case the box was labeled "Total adjustments to gain (or loss)" on the UI, so it was obvious.  Once I complete everything on the UI, I will go back and look at all the forms/schedules to see if it looks right.

[taxlady28]

The 1099-B will usually show basis as zero.  To get taxed correctly you need the form 3922 from your employer.  Use the basis from the 3922 to edit each stock transaction on the 1099-B and change zero to the correct basis.