Incentive Stock Options: Any double counting Box 1 Forms W-2 and E-Trade 1099-B Short Term Cap Gain?

Forum|Forum|6 years ago
December 7, 2019
1 reply
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TP exercised and sold ISO shares on the same date in 2018. The sale is reported on Form 1099-B (Short term cap gain) but the company’s Statement of Taxable Income also said the income from the sale (transfer) is also included in Box 1 of W-2. Should I report Box 1 Form W-2 without any reduction of ST gain from Form 1099-B? Have you encountered a situation like this? Any idea how to deal with this? Thanks.

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Best answer by sjrcpa

Report W-2 as is. The amont included in the W-2 for the ISO income is part of the basis of the stock when you report the sale on Schedule D/8949.

sjrcpaAnswer

Level 15

Report W-2 as is. The amont included in the W-2 for the ISO income is part of the basis of the stock when you report the sale on Schedule D/8949.

The more I know the more I don’t know.

PhoebeRoberts

Intuit Community Champion

Which means you'll have an adjustment to the 1099-B basis to include the W-2 inclusion amount. Your client has another piece of paper, received at the time of exercise and sale, that shows the inclusion calculation.

I'd like to beat with a stick the person who decided what the 1099-B should look like for these situations.

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