Investors & landlords

ANSWER IS CORRECT FROM AN INCOME TAX STANDPOINT BUT STEP BY STEP INSTRUCTIONS ARE ONLY APPLICABLE TO THE 2015 PROGRAM AS THE DEVELOPERS CHANGE THE INTERVIEW FLOW EVERY SINGLE YEAR.


At this point you are being double taxed.  But the issue is not that you have no place to report the 16 shares sold "for taxes." 

The cash raised through the sale of shares "for taxes" is passed back to your employer, who pays the government, and then reports those taxes as "withholding" on the W-2.  So the taxes have been reported, and you can't report them again.

The problem is that you are using the wrong basis for the sale.

Your basis in the 50 shares is: (per share fair market value used by your employer at vesting) x (50 shares) and that's exactly what has been reported to you on your W-2 as the "compensation."  So if you don't use that basis then, yes, you're effectively reporting the income twice: once on the W-2 and then again as an overstatement of gain on sale.  Your per-share basis is the same as the per-share "FMV" figure used by your employer.

Starting in 2014 brokers no longer had to report the "compensation" element of basis on the 1099-B, just the "out of pocket" basis.  For an RSU that's typically $0.  So you most likely need to report a basis for the sale of (34) x (per-share FMV used by the employer.)

Using the spreadsheet-like "fill in the boxes" default TurboTax 1099-B entry form, enter the 1099-B exactly as it reads.  Tick the box next to "This sale involves an employee stock plan (including ESPP) or an uncommon situation."  Click the blue "Start Now" button that shows up and then click the radio button next to "My 1099-B has info I know isn't right, or it has extra info I need to add."  That will allow you to add the missing amount of basis and TurboTax will show all this correctly on Form 8949.

Tom Young



View solution in original post