How do I adjust the cost basis for an NQSO sale that was also reported on my W-2?
Oftentimes, the cost basis of an NQSO sale reported on a 1099-B doesn't include the stock's discount (compensation). If the compensation was reported on your W-2 (box 12, code V), you could be paying more taxes than you need to.
Your correct per share basis for this stock is the sum per share exercise price and the per share fair market value of the stock on the date of exercise. In other words, it’s the same as per share fair market value figure used by your employer to figure the compensation.
- On the Tell us about your [company name, 1099-B] screen, enter the cost basis (box 1e) from your 1099-B, even if it's wrong. We'll correct that in Step 3.
- When finished, click or tap the I'll enter additional info on my own button at the bottom.
- On the following screen, enter the actual cost basis in the Corrected cost basis field.
- For example, if your W-2 has $7,000 in Box 12 with a code V (the correct basis) and your 1099-B shows an incorrect cost basis of $3,000, you'd enter $7,000 in the Corrected cost basis field.
- Click or tap Done and the transaction will now reflect the corrected cost basis.
A same-day (cashless) NQSO transaction will usually "net out" to a small loss, representing the commission and fees associated with the transaction.