I've been all over TT reading about RSUs, Sell to cover, etc. I get close to understanding the get more confused. I don't have an entry in box 14, but do have a $ amount in box 12c along with a "V". Same thing/good enough?
I've imported from eTrade and have a few RSU STC transactions with my own sale of the remaining vested lot of RSU (later dates) along with various ESPP sales. It sounds like it might be easier/less confusing to delete the eTrade import and enter every transaction manually.
There appears to be a bunch of RSU related articles throughout the TT Community. Is there a specific one or two that address most things or walk a rookie like me through the process?
Thanks -
JohnV
You'll need to sign in or create an account to connect with an expert.
" I don't have an entry in box 14, but do have a $ amount in box 12c along with a "V". Same thing/good enough?"
YES.
When an RSU vests, that act of vesting creates compensation reported on the W-2. The calculation of the compensation is:
(GROSS number of shares vesting) x (per share FMV at vesting date - per share out of pocket cost of to acquire)
With RSU's you typically don't have to pay anything to acquire the stock so that equation simplifies to:
(GROSS number of shares vesting) x (per share FMV at vesting date)
Since after-tax compensation income is created by the vesting your basis in the GROSS number of shares is the same as the compensation. From this it follows that your per share basis is simply:
(Compensation created by the vesting) divided by (GROSS number of shares vesting)
and that per share basis figure is the figure you use for any sales of that stock.
IF you understand that THEN there is no need to use TurboTax's RSU step by step interview to report sales of the stock. That interview has utility only if:
Starting in 2014 brokers were only acquired to report the "out of pocket" cost of employer stock on the 1099-B. Since most RSU's don't require any out of pocket cost the typical 1099-B reports a basis of $0. So if you simply enter the 1099-B as it reads and don't correct the cost basis you end up reporting income twice: once on the W-2 and then again as an overstatement of gain on the 1099-B.
(When people see their tax liability go up when the enter a 1099-B with the wrong basis reported on it they frequently figure that they need to somehow report the cash raised by the sale of shares "for taxes" in order to correct the problem. That's entirely wrong. The cash raised by the sale of stock "for taxes" relates entirely to the compensation income created by the vesting and those taxes are already reported on the W-2.)
To avoid double reporting of income, (assuming the 1099-B is reporting that incorrect basis to the IRS), you:
Tom Young
" I don't have an entry in box 14, but do have a $ amount in box 12c along with a "V". Same thing/good enough?"
YES.
When an RSU vests, that act of vesting creates compensation reported on the W-2. The calculation of the compensation is:
(GROSS number of shares vesting) x (per share FMV at vesting date - per share out of pocket cost of to acquire)
With RSU's you typically don't have to pay anything to acquire the stock so that equation simplifies to:
(GROSS number of shares vesting) x (per share FMV at vesting date)
Since after-tax compensation income is created by the vesting your basis in the GROSS number of shares is the same as the compensation. From this it follows that your per share basis is simply:
(Compensation created by the vesting) divided by (GROSS number of shares vesting)
and that per share basis figure is the figure you use for any sales of that stock.
IF you understand that THEN there is no need to use TurboTax's RSU step by step interview to report sales of the stock. That interview has utility only if:
Starting in 2014 brokers were only acquired to report the "out of pocket" cost of employer stock on the 1099-B. Since most RSU's don't require any out of pocket cost the typical 1099-B reports a basis of $0. So if you simply enter the 1099-B as it reads and don't correct the cost basis you end up reporting income twice: once on the W-2 and then again as an overstatement of gain on the 1099-B.
(When people see their tax liability go up when the enter a 1099-B with the wrong basis reported on it they frequently figure that they need to somehow report the cash raised by the sale of shares "for taxes" in order to correct the problem. That's entirely wrong. The cash raised by the sale of stock "for taxes" relates entirely to the compensation income created by the vesting and those taxes are already reported on the W-2.)
To avoid double reporting of income, (assuming the 1099-B is reporting that incorrect basis to the IRS), you:
Tom Young
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
danas200
New Member
OvermyheadNE
Returning Member
elizabethdonoghu
New Member
jcantella48
Level 1
beepa
Returning Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.