How to report "sale to cover taxes" RSUs in TurboTax Premier?

[john.inbox]

Do you report “sold to cover” as a regular stock sale in TurboTax? Seems like TurboTax is getting confused when I do that. I had 50 RSUs vested and 24 of them were sold to cover taxes. TurboTax asks the total number of RSUs for each sale. So if I report 2 sales: 

1. “sale to cover” 23 shares, and 

2. mine: 27 shares, 

TurboTax thinks that I’ve got 100 shares vested (while I had only 50), since each of the entry refers to 50 RSUs total. Basically it doesn't connect those two sales together. I obviously doing something wrong but cannot figure out what.

Can anyone help?

[TomYoung · Accepted solution]

Well yes, you are doing something wrong but that's the result of a poorly designed interview, an interview where it's easy to make mistakes, and that's why I generally advise against using the "step by step" interviews.  There's absolutely no "income tax return reporting requirement" that requires the use of that interview.  You can enter the sale more easily and with less chance of mistake if you simply use the default TurboTax 1099-B interview and then correct the incorrect basis reported by the broker.

But since you've already got information entered simply tell TurboTax about "two" vestings, one for 23 shares and the other for 27 shares with no shares withheld or sold for taxes.  That will give TurboTax the correct vesting amount of 50 shares.

And the fact that one of the sales was "for taxes" is completely irrelevant.  The cash raised from those shares was passed back to your employer, who paid the various governments, and included those amounts in the "taxes" boxes of your W-2.  You can't deduct them again.

Tom Young

[john.inbox]

Thank you very much, Tom!