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Stock Sales/Capital Gains

Forum|Forum|3 years ago
February 23, 2023
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I was awarded restricted stock units (RSU’s) by my company in 2007 and 2008 that became vested three years later, at which time the company sent me a W-2 showing the cost basis as ordinary income. I paid Federal and State income tax on those amounts in 2010 and 2011.

The shares were sold in 2022 and I was sent a 1099-B detailing the short and long term capital gains/losses on the shares, but TurboTax populated a zero cost basis. I do not see where to claim credit for the Federal taxes paid on the original cost basis and was wondering whether there is a line on the Form 1099 or if another form is applicable?

TurboTax Premier Online

Best answer by GeorgeM777

No, you don't use Form 1099 or any other form to correct your cost basis. You need to adjust your cost basis in TurboTax to reflect the value of the RSUs on the day they vested. When you adjust your cost basis to the correct amount, you will only pay tax on the capital gain, or you will realize the loss if any.

You enter your RSU information in the sub-heading Stocks, Cryptocurrency, Mutual Funds, Bonds, Other which is under Investment and Savings (TurboTax online). On the screen where you enter your sales information, you should see a box where you enter your cost basis and below that box is another option for designating that your cost basis is incorrect or missing on your 1099-B. Select the latter and enter the correct basis. TurboTax will re-calculate your gain/loss based on your corrected basis amount. If you are using TurboTax CD/download, the process is similar. You just need to adjust your cost basis to the correct amount.

It is not uncommon for a broker to enter zero as the cost basis for RSUs. The broker does not know the cost basis, and therefore, will typically enter zero for the cost basis and leave it to the taxpayer to enter the correct basis amount.

@That

G

GeorgeM777Answer

No, you don't use Form 1099 or any other form to correct your cost basis. You need to adjust your cost basis in TurboTax to reflect the value of the RSUs on the day they vested. When you adjust your cost basis to the correct amount, you will only pay tax on the capital gain, or you will realize the loss if any.

You enter your RSU information in the sub-heading Stocks, Cryptocurrency, Mutual Funds, Bonds, Other which is under Investment and Savings (TurboTax online). On the screen where you enter your sales information, you should see a box where you enter your cost basis and below that box is another option for designating that your cost basis is incorrect or missing on your 1099-B. Select the latter and enter the correct basis. TurboTax will re-calculate your gain/loss based on your corrected basis amount. If you are using TurboTax CD/download, the process is similar. You just need to adjust your cost basis to the correct amount.

It is not uncommon for a broker to enter zero as the cost basis for RSUs. The broker does not know the cost basis, and therefore, will typically enter zero for the cost basis and leave it to the taxpayer to enter the correct basis amount.

@That

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