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How do I fix the basis for an NQSO sale that was also reported on my W-2?

SOLVEDby TurboTaxTurboTax Online168Updated December 23, 2021

Oftentimes, the cost basis of an NQSO sale reported on a 1099-B doesn't include the stock's discount (also called the compensation). If the compensation was reported on your W-2 in box 12, you could be paying more taxes than you need to.

Here's how to make sure the cost basis is right when reporting the sale from your 1099-B:

  1. On the Let's get the details about this sale from your 1099-B screen, select Nonqualified Stock Options (NQSO) from the first dropdown at the top.
  2. Fill out the other fields on that screen, and when you get to the last field for box 1e, enter the cost basis from your 1099-B and be sure to put a checkmark in the cost basis is incorrect right below it. Then continue.
  3. On the following screen, select the middle option, I know my cost basis. Then enter the correct cost basis from your W-2 (the box 12, code V amount).
  4. Select Continue 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.

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