Am I being taxed twice on profit from stock options?

Q: I made about $3000 profit from selling stock options last Nov. I understand that I am supposed to fill out Schedule D, which according to how I read the instructions then has me fill in this $3000 profit figure on Line 13a of the 1040 form. It seems strange to me that I am paying taxes on this money twice, since I already paid taxes when I sold the options. I wanted to make sure I am filling out the forms correctly. Your advice would be greatly appreciated. Thanks. —Marsha, Medway

The following answer was provided by Barbara Damon, CPA, Edelstein & Company LLP.

A: When you sell options, you do report it on Schedule D. Your proceeds are the amount you sold them for as reported on the 1099-B you received. Your basis is the sum of the amount you paid for the option (ie strike price times number of shares) plus the amount that was included in your W-2. For most people this means they end up reporting a small capital loss because of the brokerage fees, if they did same day sales of incentive stock options. With other types of options the calculation is the same, but the results may vary. If you held onto the stocks for a while between exercising and selling you may have more of a gain.