Filing Employee Stock Options

[cfsadvsr]

How do you account for employee stock options whose sales are included in the taxpayer's W2; yet there is a brokerage 1099 which also
How do you go about protecting the taxpayer from double taxation, yet satisfy the IRS's requirements.

[Bees Knees]

TTB, page 6-17:

Employer reporting. The amount included as taxable compensation
is the FMV of the stock on the exercise date minus the amount
paid (exercise price). Compensation is reported to an employee
in box 1, Form W-2, and in box 12 with a code “V.” Income and
employment taxes are withheld on this income. The employee’s
basis in the stock is the amount paid plus the amount included
in compensation.

Thus, there is no double taxation because the amount taxed on the W-2 is added to basis on the sale, which reduces the gain on the sale of the stock reported on Schedule D.