Non-standard NQSO question

Okay. I am having trouble with my NQSO and inputting it into Turbo Tax.

The problem is that PART of my proceeds are included in my wages and part aren't.

Here's the numbers:

1) Cost basis $17000
2) Sales of options $33000
3) Net gain $16000
4) Amount withheld for taxes by my company AND included in my ordinary wages on my W-2 --> $5000
5) Check sent to me --> $11000

So I'm not sure how to report this in general and I'm definitely not sure how to input it into Turbo Tax.

Can I simply include the $5000 in my cost basis since it was withheld from the net sales?

Seadogs,

It sounds like you exercised and sold in the same day.

When you exercised the NQSO, the difference between the Option Price and the Market Value is income to you. This is considered compensation. You pay ordinary income tax on this difference if sell or hold your shares.

The income information should be included on your W-2, Box 1 with the additional withholding in box 2.

You should have a 1099-B showing the sale of your shares.
On Schedule D you report your stock sale ($33,000) with your basis ($33,000 plus broker fees). This probably nets a small short term capital loss.

On my W2, it only includes the tax part in my income.

It does not include the non-tax part.

Seadogs,

You paid $17,000 for the stock with a value of $33,000.
The difference ($16,000) is compensation, normal income to you.
This should be included with your wages in box 1 of your W-2.

Your basis in the stock is now $33,000.
You sell the stock for $33,000 less the broker fee.
You have a short term loss equal to the value of the broker's fee.
This data goes on Schedule D.

$5,000 from the sale is withheld for income tax purposes on your $16,000 that you realized at the time you exercised the option. That should be included in your W-2 box 2.