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Shares puchased throught employee stock option, for cost purpose what should be shown Market price then or pur?

now for tax purpose, after I sold the shares during January 2008, for the calculation of cost, should I take the purchase price or the Market value prevailed then..I have been holding the shares for more than 2 years

Public Comments

1. Your cost basis is the "exercise price", or cost charged to you for exercising your option (set forth in the stock option agreement), PLUS any amount that was already included in your W-2 income for the shares. Here is good explanation: http://turbotax.intuit.com/tax-tools/tax-tips/investments-and-rental-property/5591.html