- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Investors & landlords
For 2018, if you received an RSU for a publicly traded company, your company's brokerage services and your company's payroll have already communicated, and the value of your RSU has already been rolled up into your w2. You can check that by looking at your paystub for the period of vesting date, and the previous pay stub, and see if the numbers are correct.
The cost basis in the instant before that rollup was 0. The cost basis after that rollup is done is the Fair Market Value (FMV) of the stock which is the closing price of the day the stock was vested (to you). That is because your tax obligation is immediate and is considered a short term gain so is put into your "wages" bucket.
Sometimes, your company will decide to "withhold" some of your shares, and will contribute cash to your wages and tax buckets instead based on some policy decision by senior executives. This is *not* shares sold, and you will not receive a 1099B because the shares were not sold, they were transferred to your company. This is done to cover your butt because the tax on those vested shares is due on vesting, and to "withhold" shares and pay your tax buckets with cash eliminates (probably, see below) your penalty for underwithholding. The company's policy decision is an absolute no-win for the company people making the policy decision. If they decide too high a percentage, and the stock price rises, you don't realize the gain because you don't have the shares anymore. If they decide too low, then you have to come up with a bucket of money to pay your taxes. And the policy is set for all RSUs, whether they are large, or small.
In my case, the entire RSU is rolled into my Wages bucket. My CPA does not report RSUs on Schedule D. to avoid double taxation.
In your case you don't say whether the value of the RSU is or is not rolled into your W2. And it will make a difference on your cost basis calculation. You'll have to do the calculation to make the determination on how to adjust your cost basis.
So look on your pay stub for the date of the vesting, and see if your wages got a bump of 100*stock price on date of vesting (assuming your grant cost was 0, my experience is that they usually are) In that case you would have to calculate your cost basis for each sale as
Number of shares sold * stock price on vesting date
That way TurboTax will calculate the tax on the gain(loss) of the sale, without penalizing you for the taxes already owed on the wage bump.
If you don't see the wage bump, then you have to use 0 as your cost basis for both sales.
If you don't see the wage bump and you didn't sell all the shares within one calendar year, you have to adjust your income on line 14 of Schedule 1. Which means you have to get TurboTax to trigger form 4797 for 2018 You get to that under "sale of business property". You would enter the income as
Number of shares left unsold * stock price on vesting date