employee stock information

[kckoo84]

My brokerage is Etrade and it gives a supplement form that has adjusted cost basis for ESPP and RSUs.

For the completion of 1099B import, I'm wondering if

1. just replace imported cost basis with "adj. cost basis" and not choose any of them as "Employee stock"

2. I have to leave the cost basis form 1099 B asis (usually 0 for RSU, and lower value  than adj. cost basis for ESPP since it does not yet take in to account "ordinary income" yet), and have to enter all those information in the form 3298 / RSU vesting information.

I believe, either 1 or 2, the final calculation should be same since all those information for #2 is already took in account when the brokerage get me "adj. cost basis" for my RSU/ESPP sell. 

However, I can't figure out if doing #1, not checking any of my RSU/ESPP sell as employee stock and just swap the cost basis to "adj. cost basis" is still okay.

Any advice would be welcomed. Thanks!

[hbl3973]

kckoo84,

The shortcut to bypass RSU/ESPP dialogues and just report as a basic capital gain/loss entry depends upon a detail of your 1099-B form.  If your 1099-B states that a cost basis is being reported to the IRS, then you will need to report the 1099-B basis number as it appears on that form and then use the dialogue to indicate that that cost basis is incorrect and supply the correction.  If, however, the cost basis is not being reported, then your #1 option works just fine.

[DavidD66 · Accepted solution]

Instead of #1 or #2, I would say both.  For your RSUs, they are taxable as ordinary income when they vest, and subject to payroll tax withholding.  The value of the RSUs on the day they vest should have been included in box 1 of your W-2.  If your Form 1099-B does not show the cost basis as the value when they vested, then it will need to be adjusted.  It is not necessary to go through the Employer Stock section, you can just adjust the basis like non-employer stock.

For stock acquired through an Employee Stock Purchase Plan (ESPP), I strongly recommend you go through the Employee Stock section, as you will need to calculate ordinary income on at least part of your gain. 

Form more information see the following:

Employee Stock Purchase Plans

How do I enter Employee Stock Purchase Plan (ESPP) sales in TurboTax?

[GregoryU]

I found this thread extremely helpful, esp. for handling of RSU’s.  I have an ESPP question peripherally related to the thread.

At my company, ordinary income from RSU’s is reported on my W-2 in the year of acquisition/vesting.  Ordinary income from ESPP’s is reported on my W-2 in the year of the stock sale.  My question relates to ESPP.

This year, I sold some long-held ESPP stock (14 sales).  For the first six, I had Form 3922’s.  The data entry and proper separation of ordinary income (roughly matched my W2) and cap gains (roughly 15%) appeared accurate.  Also, the TT tax counter properly reduced the tax on each sale following calculation of the adjusted basis (by eliminating ordinary income based upon 3922 info) from the previously entered 1099 reported basis.  All is good.

For the remaining eight sales, I did not have 3922’s, so I shifted from the 3922 dialogue to the “I have all my info” option.  My 1099 Supplemental Information pages contained adjusted basis and other needed information for these sales.

Results were all over the board.  The tax counter percentage had no consistency (14% to 367%) and took tax on some sales that were losses.  Also, there was no tax recalculation (reduction) following entry of the adjusted basis.

The TT dialog is very straight-forward and I don’t think I made errors in data entry, but this screen must be widely used, so somehow the error must be mine.