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I exercised an unqualified stock option during Jan 2000. I had to pay Short Term capital gains rate on the difference between the option price and the stock price on the date of exercise. I still hold the stock today. How do I account for the Federal Taxes paid on that transaction in this years tax filing? Can I apply the tax withheld on that transaction to the total Fed Taxes withheld on the W2 for regular income so that I can recover some of the withholding? Is there some form (1099, W2, 1098, etc, etc) that I should receive to show that withholding???

Assuming that these options were for stock of your employer, the following should have happened.

1 The dfference between option price and FMV on day of exercise should be included in your W-2 as additional compensation; this is taxed as ordinary income.

2 The income tax withheld should be included on the W-2

If your W-2 doesn't reflect these items, go talk with your employer and get it fixed.

And yes, any tax withheld is applied to your tax liability when fillng your 1040
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