RSU cost basis adjustment

Forum|Forum|6 years ago
February 17, 2020
3 replies
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I had 20 RSU sales in 2019. Of course, initially the cost basis isn't accounted for when you sync to your investment account. As expected as I entered the cost basis for each RSU sale the amount I owed went down. That said, on the last two transactions the amount I owed did not go down at all. Did something change in the tax code this year because in the past it went down after all my entries?

TIA

robmob

I have the same issue. My ESPP sale accounted for the cost basis adjustment, but the RSU sale will not allow me to enter appropriate information to tie out the correct amount. I also cannot just enter the data for 1e. What recourse do I have other than adjusting the available figures? Please advise.

dxbo_csAuthor

It sounds like your situation may be different. I can enter the cost basis for my RSUs however what I owe didn't go down. I'm wondering if there is some sort of change in the tax code that limits my gains on RSUs?

NCPERSON1

can you provide some examples with numbers? sounds like you are selling at a loss??????

the cost basis of the RSU is determined when the restriction comes off the shares and it DOES NOT change.

dxbo_csAuthor

Initially my cost basis was zero for 34k worth of RSUs and after I entered 30k the cost basis it did not change my federal tax due at all.

NCPERSON1

something in your explanation does not make sense.

first, is there a clear understanding of how RSUs work?

1) your employer gives you RSUs. nothing goes into TT.

2) the restriction expires. The RSU transaction is reported in your W-2. You now have STOCK. you do NOT have RSUs. Nothing special to report in TT; (It's already in your W-2).

3) you sell the shares. you get a 1099-B from your broker, you post the cost basis and sales price in TT

you keep stating you have RSU's, but RSU DO NOT represent a taxable transaction (other than in your W-2.)

Did you sell the STOCK after the restriction expired? for the 1st transaction, please post the following

1) date the restriction expired

2) the cost basis

3) the number of shares

4) the date you sold these same shares

5) the price of the shares on the date you sold

maybe that will help solve this mystery.

r40135ca

same problem here. I have been using TurboTax for years to report RSU grant and withholding. I have 1099-B and transaction supplement from broker. Usually, the Box 1e (cost or other basis) is ZERO, then in the next page there is "Corrected cost basis" where I can enter Adjusted Cost Basis which is from broker's transaction supplement. then the numbers will go down.

For TurboTax 2020, there is no "Corrected cost basis" available, if I enter the Adjusted cost basis into Box1e, the numbers will not go down. There is definitely something changed for TurboTax 2020 to report RSU.

Where should I enter Adjusted Cost Basis from broker's transaction supplement sheet?

AmyC

Employee

Cost basis is a good place to put the actual basis.

You have to remember that the laws changed on how RSU is reported to the employer also. Employees have the option of when the RSU is reported in their income. This makes you more responsible for tracking your basis. See Employee Compensation, RSU in Tax Cuts and Jobs Act: A comparison for large businesses and international taxpayers.

That being said, you need to enter the correct basis. The broker may not have the correct basis. The IRS puts this in the employee's hands to keep up their own basis. I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s. This will protect you down the road as proof of your basis in your various investments. As you go through life, rollovers, RSU basis and sales, and more will be captured for you.

@r40135ca

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Anonymous

To Amy, when you say cost basis, do you mean box 1e? I found that field is overridden by turbo tax when it gets the info on rsu vesting day price, which is not correct. In my case, my distributed RSU shares' cost was adjusted due to wash sale rule when a portion of the lot was sold at loss for tax withholding purposes. How do I correct this turbo tax's mistake so to avoid double taxing?

On the other hand, do I have to choose the "employee stock" option if I know the exact cost basis of the RSU? Can I treat it as normal stock sale instead?

Thanks.