Sale of the stock. There are no special income rules for the sale of stock acquired through the exercise of a nonstatutory stock option. Report the sale as explained in the Instructions for Schedule D (Form 1040 or 1040-SR) for the year of the sale. You may receive a Form 1099-B reporting the sales proceeds. If you sell stocks, bonds, derivatives or other securities through a broker, you can expect to receive one or more copies of Form 1099-B in January. This form is used to report gains or losses from such transactions in the preceding year. People who participate in formal bartering networks may get a copy of the form, too. Adjusted gross income is your total taxable income after adjustments. You'll first need to calculate your total income, which includes wages from Form W-2 and self-employment income, taxable interest and dividends, alimony payments received, capital gains, rental income and any other payments you received that aren't tax exempt. After you take all available deductions from that sum, including