Cost basis for vested stock option

peter21

I'd like to know how to calculate the adjusted cost basis for vested stock option. The stock options were vested say Oct 1st, and were sold on the same day. The 1099B reported cost is say $2000, and the gross proceeds is $5000, so my gain is $3000. This $3000 was taxed withheld in my w2, I only get ~$2000 deposit to my checking account. I think I need to do a cost adjustment in schedule D so that this vested stock won't be taxed twice. Is the adjusted cost ($2000 + $3000)?

kiarab

Hello,

Yes, it sounds like you need to make an adjustment to your basis since you were already taxed on the 3,000 on your W-2. What you will want to do is enter your W-2 and 1099-B like normal. Then, after you entered your 1099-B, you will want to select that you have an adjustment. That should allow you to enter the correct basis (amount you paid for it plus ordinary income reported on your W-2)

We have a great article that goes into more depth about it. https://community.freetaxusa.com/kb/articles/151-what-is-an-employee-stock-purchase-plan-espp-and-how-is-the-income-reported-and-taxed