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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I'd like to beat with a stick the person who decided what the 1099-B should look like for these situations.
If your client had selling expenses, you should expect a small capital loss in the amount of selling expenses once you've made any appropriate adjustments to the 1099-B. Your client has another piece of paper that they haven't given you yet.