RSUs vested and were not sold, but taxes were withheld at vesting.

Forum|Forum|3 years ago
March 30, 2023
1 reply
0 views

Can you please comment on how the values are entered in TurboTax fields?

ThomasM125

What happens is when the restricted stock units (RSU's) vest, you receive compensation that is reported as wage income and entered on line 1 of your form W-2. Since it is wage income, you owe social security, Medicare and potentially income taxes on the compensation. Consequently, shares of the stock are "sold" to raise the money necessary to pay the payroll taxes. In TurboTax, you will enter your W-2 form and that will report the compensation and taxes withheld. In addition, you will normally receive a Form 1099-B reporting the sale of stock. The cost basis of the stock should be about the same as the sale proceeds since the stock was sold just hours or days after it vested. If there is a big disparity between the cost basis and sales proceeds, you may need to adjust the cost basis by adding the compenation from the RSU's listed on your W-2 form to the cost basis reported on the Form 1099-B, otherwise you may get doubled taxed on the ordinary income component of the vesting of the RSU's. You can follow these steps to adjust the cost basis reported on a form 1099-B:

Choose the Federal option on your left menu bar
Choose Wages & Income
Choose the Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto) option
Choose the Stocks, Bonds, Mutual Funds option
Enter your Form 1099-B information and check the box that says "The cost basis is incorrect or missing on my 1099-B" and you will see an option later to enter the correct cost basis

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

CG01Author

What if I never received the 1099. Can I just enter the information from the RSU transaction advice? I am uncertain about the first section which asks Date sold (I use vesting date) and then # of Shares sold. Do I enter the entire RSU award that vested; i.e. 100 shares or do I just enter the sale for the shares withheld; i.e. 25 shares? Can I assume cost bases is generally the same as the fair market value at the vesting or do I go back to the original price when the award was granted?

Thank you for initially responding.

AbrahamT

The cost basis is the market value of those RSU's at the time you received them. Don't enter anything from a RSU transaction advice. I would suggest that you go back to your broker and get the 1099B from them to make sure you enter this information correctly.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"