Fed. reporting of NQSO cashless for cash exercise

[justtoknow]

What is the name of your state? Georgia
I exercised a NQSO in 2004. It was a cashless for cash exercise (no shares were held and sold at a later date). The taxable amount of the option is included in my W-2 (box 12c-V). Taxes were withheld also and are include on W-2. I received a 1099-B from the broker which shows (in box 2) total proceeds (market value of options at exercise) from the transaction. Box 4 does not show any tax withheld. I assume that since the income/gain is already included in Box 1 of the W-2, that I do not report the 1099-B gross proceeds as a stock transaction on Schedule D. If I don't, will the IRS not flag my return since they receive a copy of the 1099-B?

 

[Snipes5]

Report it on Schedule D as a wash, no gain, no loss. This will cover the 1099B issue.

The "V" on your W-2 will clue the IRS in to the fact that the transaction was reported on your W-2.

Snipes

 

[justtoknow]

Many thanks. I had a vague assumption that would be what needs to happen. I have exercised options in the past (that were include in W-2), but never received a 1099-B, so it didin't cross my mind to even worry.

Thanks again, big help.