How to report adjusted cost basis for E*Trade RSUs using new TT2021 step-by-step?

[dboeger1]

I'm going through the step-by-step format of TT2021 Windows download product, and after importing a bunch of employer RSU sales from E*Trade, I'm pretty sure I need to enter adjusted cost basis for all of the sales as I have done in previous years. However, it seems to have a slightly updated interview process (unless I just forgot how it used to work). Regardless of whether I report $0 or the adjusted amount provided by E*Trade in a supplemental form, the step-by-step process eventually reaches a screen titled "Enter Vesting (or Release) Information" which asks for details pertaining to vesting lots and sell-to-cover transactions.

What confuses me is that it doesn't seem intuitive to ask for this information twice for separate related transactions. For example, if I have 7 shares that vest, 3 shares are automatically sold to cover the tax cost, and then I sell the remaining 4 shares a few days later, am I supposed to duplicate the same lot information for the original sale of 3? Or am I just supposed to delete that original sale of 3 and let the step-by-step process report it based on my answers? If the latter, how would anybody know to do this given that there are no explicit instructions to do it this way? After all, E*Trade's statements (and I'm assuming those of most other brokerages) just list the sell-to-cover transactions like any other transaction.

I realize that I could probably go back and forth with the forms format and figure this out, but the whole point of buying this product is that I'm not super comfortable looking at the forms myself, especially if I'm worried about conflicting with whatever the automated process is doing. Surely, there must be somebody who understands that screen better than I do.

Edit: After playing around with it some more, I think there's something seriously wrong with some combination of the current step-by-step process and/or the backend forms logic. I filled out the information as requested for all individual RSU sales to the best of my ability, which generated a large number of worksheets of types "Emp Stock Wks" and "Capital g/l adj (<number>sh <company>)". Most of them don't have errors (aside from the slight differences from the adjusted values provided by E*Trade's supplemental form, which are due to how TurboTax rounds the values provided during the step-by-step process).

However, I do get a few errors in the "Emp Stock Wks" forms which are at least in part due to seemingly inconsistent behavior in the "Capital g/l adj" forms. When I look at the error-free corresponding form pairs (1 of each type per sale), the number of shares matches. However, on some of the ones that have errors, the stated number of shares does not match. Even more frustrating is that the software only lets me edit the "Emp Stock Wks" forms, but not the "Capital g/l adj" forms, which seem to be the source of the error.

I'm not writing off the possibility of user error on my part, but even if that's the case, not letting users manually input the values that E*Trade provides in its supplemental form as in prior years seems like a huge oversight. As far as I'm concerned, RSU reporting is broken in TT2021, at least for my purposes. At this point, I'm going to try leaving some of the interview questions blank and manually providing the correct adjusted cost basis just to see if that works, but if not, I may just have to go the summary route and attach a PDF.

Edit 2: For what it's worth, I decided it would be easier to just delete all RSU sales and input them manually just to make sure the forms are clear, and it turns out that deleting the forms causes bugs in the program. I get C++ stack traces and a WIN32 message asking if I want to break into a debugger. Surely this is not intended behavior, and it doesn't instill confidence in this part of the product, at least.

[GeorgeM777 · Accepted solution]

Yes, what you indicated in Edit 2 is certainly an option and given your understanding of RSUs and the relevant aspects of these transactions, you can report these sales as a simple sale of "plain-vanilla" stock, stock that's no different than a stock you bought through your broker. You will have to delete what you have entered, and it appears you have already done that.  In the end, the overriding objective is to create an accurate tax return, and it appears you have done that. 

While you might have already completed this task, answer NO to 'is this employee stock ' which will avoid having to enter vesting info, stock sold for taxes, etc.  Moreover, the value of the RSUs has already been included on your W-2 and reported to the IRS by your employer. 

@dboeger1

[dboeger1]

Thanks for your suggestion. I eventually ended up doing more or less what you suggested, albeit slightly differently; I was able to answer that it was employee stock, but when it asked which type it was, instead of answering RSU, I just chose none of the above, which then allowed me to input adjusted cost basis manually. I tested what would happen if I said it was not employee stock, and it went to the same menu, so either way seems to work. I happened to have a few ESPP sales as well, and interestingly enough, when selecting the ESPP type, it does give the user the option to input manual cost basis, unlike for RSUs. So the takeaway is that for some reason, if you want to manually input adjusted cost basis, don't tell TurboTax that they're RSUs.