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How do I determine the cost basis and then enter it correctly into my tax software program

I am having difficulty in figuring out how to enter the correct basis for my stock sale. I left my company in 2014 and exercised all remaining options. They were sold in two transactions on the same day, income tax was withheld and reported on my W2. I received a 1099-B form showing the details of the sale but the form does not list in box 4 the income tax that was taken. Since I have already been taxed on this, I'm trying to figure out how to enter the information correctly to avoid the double taxation. From what I can garner so far I think I think I have to change the cost basis (which would be different than what is reported in the 1099) and show a small loss that would reflect the commissions paid. For example, my 1099 shows the proceeds as $33,387 (basis is $26,921). My year end statement shows the tax withheld as $1,551 which is not on the 1099. The individual transaction documents also show the federal tax along with the FICA etc. I am using H&R Block software and it does not really help with figuring this out. Any help will be appreciated
Schedule-D Form 8949
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Tax Professional Answers

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Daniel Bosler
Your situation is relatively common, and relatively commonly gives people fits! However it is not really that complicated. The gain from the exercise of your stock options was reported on your W2 and you had taxes withheld for the recognized income. The key is "the gain was recognized"--already. Your adjusted basis on your stock is therefore the same as the proceeds, and the gain is zero. My software has a place to report the costs of sale or other adjustments. You need to put the recognized gain (the amount necessary to bring the gain to zero) in this adjustment area to report the gain as zero. You may call me at 810-629-0845 if you have any other questions.
Leave a Comment 341 weeks ago

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Question Owner
Thanks for responding. I was able to figure the actual process (eventually) but it was not clear within the tax program on how to enter it. I did get it completed on time and avoided the additional taxation. Appreciate the follow up.
Reply 341 weeks ago

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