Question

RSUs vested but not sold

Forum|Forum|7 years ago
June 6, 2019
1 reply
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In 2016, I had several lots of RSUs vest, but none (net shares after taxes) were sold. I received a 1099 form from Charles Schwab. All the transactions shown are for the amounts sold for tax purposes. Box 14 of my W-2 indicates the gross amount of RSU compensation. Am I being double taxed?

TurboTax Premier Online

T

TomYoung

Employee

"Am I being double taxed?"

If you simply enter the 1099-B as it reads you will be. Brokers are not required to report anything but your "out of pocket" cost for stock acquired via an RSU and since your out of pocket cost is $0 mindlessly entering the 1099-B and filing the resulting income tax return would result in double income reporting: reporting the compensation income associated with the vesting on your W-2 and then overstating your short term capital gain based on the 1099-B.

Each "vesting" constitutes a "lot". The compensation created by the vesting is calculated as:

(GROSS number of shares vesting) x (per share "fair market value" used by your employer for that lot)

Accordingly your per share basis for any particular lot is the same as that per share fair market value figure.

Enter the 1099-B exactly as it reads and then click the blue "I'll enter additional info on my own" button. On the next page enter the correct basis in the "Corrected cost basis" box. The correct basis is: (# of shares sold) x (per share basis for that lot.)

Tom Young

(SINCE THE DEVELOPERS CHANGE THE SECURITY SALE INTERVIEW EVERY SINGLE YEAR I'LL NOTE THAT THIS ANSWER'S DIRECTIONS ON HOW TO CORRECT THE BASIS FOR THE SALE PERTAINS TO THE 2016 INCOME TAX YEAR. I'M SURE THAT THE INTERVIEW WILL CHANGE IN THE YEARS AFTER THAT.)

S

sw324Author

Thanks Tom. What's still confusing me is that my 1099 form reports on only the shares sold for tax purposes. For example, let's say I had 20 shares vest, and 8 were sold for tax purposes (same-day sale). Say they sold for $10 per share. My 1099 is saying, proceeds of $80, cost basis of ~$80 for the 8 shares "sold". I continue to hold the remaining 12 shares. Are you saying that when I enter this transaction in TT, I enter $80 for proceeds, $80 for cost basis (or exactly as the form states), and then on adjusted cost basis I put in $200 for the gross amount?