usually with the exercise of options, the w2 shows you the amount of money that was included in wages of the stock that was exercised, this amount is not reported on Sched D, it is just mandatory that when certain stocks (such as employee stocks) are exercised, they must be reported as income, with appropriate tax withheld on them. When they sell these stock rights, they are reported on 1099B , in the supporting schedules, it usually states the proceeds , the cost basis and adjusted cost basis (which accounts for the taxes already paid on these stocks when exercised), this adjusted basis, should used on Sched D to report the true gain or loss, unless the stock had a tremendous run from the time it was exercised, until the time it was sold, the gain is usually very small, but hey, in this market, the sky is the limit, hope this helps!