Background:
I worked for a tech company in 2019. It was later dissolved and all the RSUs were converted into equivalent cash distribution (priced at that time) and given out to all the RSU holders. In my case, I tried to sell all the stocks before the deadline.
I was able to sell it however, at a (lower) price ~$19.5 (hence 1099-B). Actual stock price at that time was ~$70. Later I received the cash distribution per share ~$51.5 (hence 1099-DIV, Box 9). To summarize, my RSUs were partially sold (priced at $19.5) and partially distributed in cash (priced at $51.5).
How can I report above event? Below is my understanding. Can someone please correct if I am wrong.
The way I'll be reporting this will be for every sell (or line) in my 1099-B, I'll have to subtract the amount which I've already paid taxes on at the time of vesting.
E.g. (form simplicity rounded off some numbers).
Let's say I was awarded 120 shares trading at $30 (when vested). 20 shares were traded for taxes. After taxes I received 100 shares, worth of $3000.
Now last year, one share was sold for $19.5, and cash liquidation of $51.5.
Per share profit at distribution time is: 19.5 + 51.5 = $71.
And so I received net = 100 * $71 = $7100.
Capital gains for these 100 shares:
= 100 * (share prices at proceeds - share price on which I already paid taxes for)
= 100 * (71 - 30) = 4100.
This could also be computed in terms of dollar amounts by subtracting dollar amount after taxes at the time of vesting ($3000) from net proceeds ($7100).
So basically my TT would look like below for a line in 1099-B:
Total shares = 100
Proceeds = $7100
Cost basis = $0
Adjusted cost basis = $3000
Capital gain = $4100
@ThomasM125Above question is in response to
this question I'd earlier posted. However, that question doesn't provide the full picture.
