NQ Stock Options coded incorrectly on W2 and 1099B

[kamckinley]

Good morning,

I have a client who has received NQ stock options from her company for many years. She typically sells the same day she exercises the options. Compensation value is usually reported on her W2 box 12 code V, 1099B usually reports cost basis, but it's usually wrong and I have to adjust it.

This year the W2 does not have code V in box 12, but I can see from her final paystub that the compensation value was included in her taxable wages as in previous years.

Does she need to get a corrected W2 before I can file her taxes?

Also, the 1099-B shows this as covered with cost basis provided, but the cost basis is wrong (it doesn't take into account that the compensation value has already been taxed). Do I need to add a statement or note to the return to avoid a mismatch notice?

Thanks in advance!

[Kram BergGold]

What I would do

I would not worry about the missing info in box 14. As for the incorrect cost basis, you enter the provided basis and then there is space to enter the correct cost basis. I would just use it with no explanation. I find the IRS does not look at explanations. But you could attach one. No harm in doing so.

[kamckinley]

Thank you Kram. However, Code V should have been reported in box 12 (not 14). Does that make a difference?