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I hope this is the proper board for the following issue...

I am in the process of using Turbo Tax to prepare my federal tax return and am hung-up on how to report the sale of Incentive Stock Options. By way of background, I was granted these ISO's on 12/15/2004 at a price of "P1" per share. This summer, my company was acquired by another and all options were fully vested on the closing date of the transaction for a price of "P2" per share. I filled out a form, "Notice of Cashless Stock Option Exercise", gave it to my company's finance guy, and received a check in the mail after a couple of weeks in the amount of $(P2-P1) x number of options I was granted. Nothing related to this transaction has shown up on my W2 or any other tax forms.

Anyhow...Turbo Tax is asking me what the "cost basis" is for these options. Would this be $(P2-P1) or something different?

many thank for any insight!
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