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In '97, I exercised some of my incentive stock options. The brokerage, who holds the company's incentive stock, sent me a 1099-B for the cashless transaction gross cost (I sold stock to pay for buying the stock). However, my employer also put down the net profit amount on my W-2 as Deferred Compensation.

Now, obviously I can't look for IRS-sanctioned tax advise here, but can someone tell me if this sounds a bit screwy. I mean, I'm going to pay tax on this money twice.

Any thoughts?

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