Solved: How do I identify how many shares I sold in each lot of a restricted stock transaction?
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How do I identify how many shares I sold in each lot of a restricted stock transaction?

I sold all of my restricted stock awards after I retired in 2016.  One transaction included multiple lots.  Since my 1099-B doesn't include the shares that I sold to cover taxes when vested, the gains are incorrect because the system is using the FIFO method to calculate gains from stock sales from each lot.  How do I identify how many shares of stock I sold from each lot in a single transaction?  I saw a form somewhere that allowed me to change the method from FIFO but now I don't see it.

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How do I identify how many shares I sold in each lot of a restricted stock transaction?

FIFO is the default method of ordering stocks for purposes of determining basis.  You could only have changed the default method if you gave the broker specific instructions before the trade settled.  But I don't think that has anything to do with your issue.  In any case, if you sold all your stock it doesn't make any difference whether you use LIFO or FIFO at this point.  The sum is going to be the same either way.

"Since my 1099-B doesn't include the shares that I sold to cover taxes when vested, the gains are incorrect..."

That simply is not the case.  If you sold stock to cover tax at vesting you presumably reported some amount of basis associated with the sale, and those stocks are no longer part of the equation in coming to a basis for your 2016 sales.  People frequently make the mistake that the shares vested are somehow "pre-taxed" or that those taxes somehow need to be mentioned when they later sell the shares they received.  The taxes you paid at vesting has absolutely no influence on a subsequent sale of stock.  You paid taxes on "compensation".  It happened that you paid those taxes by selling some stock but that's irrelevant; that sale happened some years ago and were reported in a 1099-B back then (Or not, but a "same day" sale generally reports a very small loss due to selling commissions and fees, and, accordingly, is irrelevant.)

"How do I identify how many shares of stock I sold from each lot in a single transaction?"

It sounds like the broker has been keeping track of the lots even if you haven't and presumably can identify exactly what shares were sold, if a FIFO fashion. 

"the gains are incorrect..."

You don't know what shares from which lots were sold but somehow you know the "gains" are incorrect?  Do you really mean the gains are "too high" and that you somehow feel you're double reporting income?

Starting in 2014 brokers have only been required to report your "out of pocket" cost for shares acquired via an Employer Stock Incentive Program, not the "real" cost of your out of pocket cost, (which might be $0) plus the compensation income created by the vesting.  Are you sure that this isn't the issue you are facing?  You might want to look through the "supplemental information" sent to you by the broker along with the W-2, to see if the "correct" basis isn't spelled out there.

"I saw a form somewhere that allowed me to change the method from FIFO but now I don't see it."

I don't ever remember seeing something like that in TurboTax but, as I said, the method used to accumulate costs has to be communicated to the broker before the settlement date.  That ship has sailed.

Tom Young



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Level 12

How do I identify how many shares I sold in each lot of a restricted stock transaction?

FIFO is the default method of ordering stocks for purposes of determining basis.  You could only have changed the default method if you gave the broker specific instructions before the trade settled.  But I don't think that has anything to do with your issue.  In any case, if you sold all your stock it doesn't make any difference whether you use LIFO or FIFO at this point.  The sum is going to be the same either way.

"Since my 1099-B doesn't include the shares that I sold to cover taxes when vested, the gains are incorrect..."

That simply is not the case.  If you sold stock to cover tax at vesting you presumably reported some amount of basis associated with the sale, and those stocks are no longer part of the equation in coming to a basis for your 2016 sales.  People frequently make the mistake that the shares vested are somehow "pre-taxed" or that those taxes somehow need to be mentioned when they later sell the shares they received.  The taxes you paid at vesting has absolutely no influence on a subsequent sale of stock.  You paid taxes on "compensation".  It happened that you paid those taxes by selling some stock but that's irrelevant; that sale happened some years ago and were reported in a 1099-B back then (Or not, but a "same day" sale generally reports a very small loss due to selling commissions and fees, and, accordingly, is irrelevant.)

"How do I identify how many shares of stock I sold from each lot in a single transaction?"

It sounds like the broker has been keeping track of the lots even if you haven't and presumably can identify exactly what shares were sold, if a FIFO fashion. 

"the gains are incorrect..."

You don't know what shares from which lots were sold but somehow you know the "gains" are incorrect?  Do you really mean the gains are "too high" and that you somehow feel you're double reporting income?

Starting in 2014 brokers have only been required to report your "out of pocket" cost for shares acquired via an Employer Stock Incentive Program, not the "real" cost of your out of pocket cost, (which might be $0) plus the compensation income created by the vesting.  Are you sure that this isn't the issue you are facing?  You might want to look through the "supplemental information" sent to you by the broker along with the W-2, to see if the "correct" basis isn't spelled out there.

"I saw a form somewhere that allowed me to change the method from FIFO but now I don't see it."

I don't ever remember seeing something like that in TurboTax but, as I said, the method used to accumulate costs has to be communicated to the broker before the settlement date.  That ship has sailed.

Tom Young



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