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crashq111,
No, RSUs are not gifts. They have two taxable events:
(1) When they vest, you are taxed when you received the shares. Their value is the market value of those shares at the time of vesting. At that point, your cost basis in the shares becomes that market value and the vesting date is your acquisition date. That income is reported via your W-2 for that year.
(2) When you sell the shares, your profit (or loss) is the difference between the sales price and the cost basis noted in (1). Whether the sale is treated as short term or long term depends upon whether you hold onto the shares for more than a year.
If, as I infer, you have held shares for some time period after the RSU vested, I very much expect step (1) was handled by the company redeeming and selling a portion of the RSU shares to cover the initial taxes. This would have resulted in a small short term gain or loss (probably the latter to cover brokerage fees). The proceeds of the sale would have also been lumped into your W-2 tax withholding.
So, for this sale, do pull out the original vesting paperwork in order to look up the fair market value the company used in order to properly input your 1099-B transaction into TurboTax.
If you want to delve into more details on RSU treatment, I have found that Fidelity has pretty comprehensive information on their website https://www.fidelity.com/products/stockoptions/rstockunitsfaq.shtml .
crashq111,
No, RSUs are not gifts. They have two taxable events:
(1) When they vest, you are taxed when you received the shares. Their value is the market value of those shares at the time of vesting. At that point, your cost basis in the shares becomes that market value and the vesting date is your acquisition date. That income is reported via your W-2 for that year.
(2) When you sell the shares, your profit (or loss) is the difference between the sales price and the cost basis noted in (1). Whether the sale is treated as short term or long term depends upon whether you hold onto the shares for more than a year.
If, as I infer, you have held shares for some time period after the RSU vested, I very much expect step (1) was handled by the company redeeming and selling a portion of the RSU shares to cover the initial taxes. This would have resulted in a small short term gain or loss (probably the latter to cover brokerage fees). The proceeds of the sale would have also been lumped into your W-2 tax withholding.
So, for this sale, do pull out the original vesting paperwork in order to look up the fair market value the company used in order to properly input your 1099-B transaction into TurboTax.
If you want to delve into more details on RSU treatment, I have found that Fidelity has pretty comprehensive information on their website https://www.fidelity.com/products/stockoptions/rstockunitsfaq.shtml .
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