It was documented on your W-2. The cash raised by shares sold "for taxes" is passed back to your employer, who pays the government and includes those taxes in the withholding section of your W-2. You can't claim those taxes again.
This is a common question that arises when people sell stock acquired through an employer stock incentive program and realize that they are being taxed twice on the income: once on the W-2 and then again as a gain on sale. The problem isn't that the taxes withheld haven't been reported, (they have), the problem is that people are using the wrong basis to report the sale.
Clearly the correction is to report the correct basis which is the sum of what you paid for the stock plus the compensation income created by the exercise. Since the compensation created by the exercise is the "spread" between the fair market value at the date of exercise and the price you paid to obtain the stock, your per-share basis comes back to the same per-share basis the employer used to calculate the compensation.
Too, 1099-B's no longer include the "compensation" element of your basis, only the "out of pocket" element of you basis. When you enter the 1099-B just as it reads you recognize the compensation again as "gain."
Enter the 1099-B exactly as it reads. Tick the box next to "This sale involves an employee stock plan (including ESPP) or an uncommon situation." Click the blue "Start Now" button that shows up and then click the radio button next to "My 1099-B has info I know isn't right, or it has extra info I need to add." That will allow you to add the missing amount of basis and TurboTax will show all this correctly on Form 8949.
Tom Young
