For sale of stock, how do we indicate that some RSU sales were included on our 2016 W-2, while other RSU sales were not included on the W-2?

[carlisaacson]

Because the 1099-B did not include the lot details for the RSU sales, we have to enter the RSU sales manually.  When we do that, the entire RSU sale proceeds are lumped into a single amount, and Turbo Tax asks us if the RSU sales were included on the W-2 or not.  We are forced to answer yes/no for the entire amount.  But what we want to do is say "yes, included on W-2" to a partial amount of the RSU sales, and "no, not included on W-2" to the rest of the RSU sales.

[TomYoung · Accepted solution]

You clearly have used the RSU step by step process here to enter your sales and you have entered some information incorrectly.

I generally advise that people do not use the RSU step by step process as users are frequently confused by the interview, (case in point here), and there is no "income tax reporting" necessity to use that interview.  You can simply enter the sale or sales using the "normal" 1099-B, entering the broker's incorrect reporting of basis ($0) and then fix the basis.

You correct the basis by clicking the blue "I'll enter additional info on my own" button.  On the next page you enter the correct basis in the "Corrected cost basis" box.

So, IF you know the basis to use for your sale or sales THEN I'd suggest deleting the trades you've entered and simply entering them as I've described.

Going back to the RSU step by step process:

TurboTax calculates the compensation for each vesting exactly the same way your employer calculates the compensation:  (GROSS # of shares vesting) x (per share FMV at vesting date). 

And of course TurboTax understands that if a vesting took place in 2015 or earlier the compensation it calculates on those vestings  is not included in the dollar amount it shows you on the "Your Employer Stock Plan Results" page for a 2016 income tax return since your W-2 only covers 2016.

You've made one of two errors here:

1. You reported vestings in 2015 or before as "2016" vestings, (unlikely) or
2. You reported a 2016 vesting multiple times (more likely).

If you had an RSU for 100 shares vest in 2016 and those shares were reported to you as two sales of stock, if you tell TurboTax about that vesting twice, i.e., state "100" shares vested for the first sale and then state "100" shares were vested for the second sale, TurboTax can't "know" that you're referring to the same vesting each time.  So it will calculate compensation based on 200 shares vested.  So in that case you need to break that vesting into two parts, e.g., "40" shares for one sale and "60" shares for the second sale.

Don't enter anything into the shares "for taxes" box or you'll end up running into a new problem.

Tom Young