How to tell if Cost Basis for vested RSUs were imported correctly from ETrade?
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How to tell if Cost Basis for vested RSUs were imported correctly from ETrade?

I work at a company where part of my compensation is through Restricted Stock Unit grants. I have worked at this company for almost three years, therefore I had some RSUs vest in the calendar year 2016. My company does an automatic sell-to-cover when RSUs vest, so they sell just enough to cover the tax liability, then I get the remaining shares placed in my ETrade account.

I have heard some rumblings from others in my company that the 1099 form does not import correctly from ETrade to TurboTax, and it makes it seem that the sell-to-cover is actually a straight sell, and employees made money from selling those RSUs, however this is clearly not the case as we don't see any of the money from the sell (as it goes to pay taxes). My question is, how do I ensure that my 1099 form is correct and I am not being penalized from ETrade for the sale of shares of stock that I never saw anything from?
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How to tell if Cost Basis for vested RSUs were imported correctly from ETrade?

First off, this is not really an "eTrade" problem nor is it a "TurboTax" problem. 

Starting in 2014 the IRS's 1099-B instructions pertaining to "Box 1e. Cost or Other Basis" read:

"You cannot increase initial basis for income recognized upon the exercise of a compensatory option or the vesting or exercise of other equity-based compensation arrangements, granted or acquired after 2013."


"My question is, how do I ensure that my 1099 form is correct"

Generally you compare the imported information to the information on the paper copy of the 1099-B you receive in the mail and if everything between the two agree then the 1099-B form you've imported is "correct" from the standpoint of what eTrade is obligated to report.

But I expect you mean that the basis is stated correctly from the standpoint of reporting the trade to the IRS and if you see $0 in the cost basis box - as I'd expect you should - then the basis needs to be corrected.

For the 2016 program you'd enter the 1099-B exactly as it reads and then click the blue "I'll enter additional info on my own" button.  On the next page enter the correct basis in the "Corrected cost basis" box.  The correct basis is: (# of shares sold) x (per share basis for that lot.)


Tom Young



(SINCE THE DEVELOPERS SEEM TO CHANGE THE SECURITY SALE INTERVIEW EVERY SINGLE YEAR I'LL NOTE THAT THIS ANSWER'S DIRECTIONS ON HOW TO CORRECT THE BASIS FOR THE SALE PERTAINS TO THE 2016 INCOME TAX YEAR.  I'M REASONABLY SURE THAT THE INTERVIEW WILL CHANGE IN THE 2017 PROGRAM.)

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