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Etrade sell to cover taxes on stocks I get from my employer. Example: vest 67 sell 27 to cover tax. In 1099-B, they report only the 27 sold. Do I pay tax for those 27?

 
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Etrade sell to cover taxes on stocks I get from my employer. Example: vest 67 sell 27 to cover tax. In 1099-B, they report only the 27 sold. Do I pay tax for those 27?

If this was a "cashless" transaction then the purchase would be on your W-2  and the sale is on the 1099-B from the broker.  If it is done correctly, the broker will show the basis as the amount you have already been taxed on the W-2 form so the sale will show a loss of the cost of the broker's fee ... you MUST enter that 1099-B info on the return ... failure to do so will result in a nasty letter from the IRS later. 

Etrade sell to cover taxes on stocks I get from my employer. Example: vest 67 sell 27 to cover tax. In 1099-B, they report only the 27 sold. Do I pay tax for those 27?

The direct answer to your direct question of "Do I pay tax for (the sale of) those 27?" is almost certainly "No." 

 

Your per share basis of those 27 shares is the same as the per share fair market value used by your employer to calculate the compensation created by the vesting of the 67 shares, and you've already paid the tax on that compensation.  So for a same day sale you expect that your per share selling price and that per share fair market value number would be more or less the same, creating a small loss due to selling commissions and fees.   (Occasionally, you receive a higher per share selling price than the per share figure used by your employer, so a small taxable profit can occur.  That's why I qualified by answer with "almost certainly.")

 

The issue you face here is that the 1099-B almost certainly has the wrong basis, though the broker should have disclosed the correct basis to use on some "supplemental information" that came with the 1099-B.  Be sure you use the correct basis when you report the sale.

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