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Yes. You have two reportable events here. First, the vesting of the options, which is ordinary income reported on your W-2. Second, the sale of the stock, which is reported on your Form 1099-B. The key is to adjust your basis in the stock, if necessary, so that it equals the amount of ordinary income reported on your W-2 for the vesting. The result will be no gain, or often a small loss due to trading fees, on the subsequent sale.
Please follow this link for more information. Stock Options
I exercised company stock options last december - it was a simultaneous purchase and sale. The net gain is reported in my W-2 as income. It is also reported in my broker statement 1099-B. Here is the twister - the 1099-B forms states that this is a short term transaction for which the cost basis is reported to IRS. it has the same figures (net sale price, cost basis and net income) - the final number net income is the same (almost) as the income reported on my W-2. When I import this 1099-B into turbotax this is going to go into schedule D - how can I prevent paying taxes twice on this option exercise?
Since the gain on that stock sale was included as income on your W-2, to avoid double taxation:
For additional information, see the TurboTax article: Non-Qualified Stock Options.
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