Hello!
Could somebody please help answer this question about my RSU transactions?
My broker has issued a 1099-B with a “Supplemental Information” section.
This form has 2 columns among other columns: Ordinary Income Reported (y) and Adjusted Cost or Other Basis (z)
For some transactions, Ordinary Income Reported (y) and Adjusted Cost or Other Basis (z) match, while for other transactions they do not match.
The transactions where they match, both “y” and “z” = number of shares * FMV on the date of distribution.
All this makes sense. I understand very well that I need to adjust the cost basis so that I don’t get taxed twice.
However, for some transactions, Ordinary Income Reported (y) and Adjusted Cost or Other Basis (z) DON’T match.
Could someone please help me understand why?
Here’s the distribution information for a sample transaction:
Grant Date : 2020
Purchase Date : 2022
Shares distributed: 40
Shares netted at FMV to cover tax withholding: 14
Net Shares deposited: 26
FMV on the trade date of distribution: $526.71
So, my understanding is that the cost basis is $526.71 * 26 = $13,694.46
I sold these 26 units all at the same time for a selling price of $504.39. After some commission fees, the total proceeds from the sale were $13,113.84
However, in my 1099-B’s “Supplemental Information” section, the sale of these 26 units has been broken into 2 transactions.
Transaction-1
Units 10
Proceeds $5,043.78
Ordinary Income Reported (y) $5,267.10
Adjusted Cost or Other Basis (z) $5,489.62
Wash Sale Loss Disallowed $0.00
Adjusted Gain Loss -$445.84
Transaction-2
Units 16
Proceeds $8,070.06
Ordinary Income Reported (y) $8,427.36
Adjusted Cost or Other Basis (z) $9,139.41
Wash Sale Loss Disallowed $1002.52
Adjusted Gain Loss -$1069.35
The proceeds of Transaction-1 and Transaction-2 add up to $13,113.84, which is what I expected. I sold these 26 units all at the same time for a selling price of $504.39. After some commission fees, the total proceeds from the sale were $13,113.84
The Ordinary Income Reported (y) of the 2 transactions adds up to $13,694.46. It makes sense because it’s = $526.71 * 26
However, the Adjusted Cost or Other Basis (z) of the 2 transactions adds up to $14,629.03
How is the Adjusted Cost or Other Basis (z) calculated and why is it different from the Ordinary Income Reported (y) for this transaction? For other transactions, the two numbers are equal.
~Thanks
