RSU - Sell to cover for 2020. How to report it on TurboTax?

[abhiverma812]

Hey,

I got RSU from my company which got vested in 2020. As part of tax payment, my company sold few stocks as sell-to-cover. The amount is added to my W-2. However, Etrade issued 1099-B for this sale and marked in short term gain with 0 cost basis. Should I even report these proceeds on turbo tax as they are already part of W2? If I should, is there a way to tell the tool that these are sell-to-cover? 

Thanks,

Abhishek

[ColeenD3]

Please see this answer from Tom Young.

If the 1099-B reports the sale of shares that were for taxes then you need to report that sale.  The cash from the sale of shares sold "for taxes" was passed back to your employer, who paid the government, and included those amounts in the "taxes withheld" boxes of the W-2.

Since it's a Box B sale - basis not reported to the IRS - you simply enter the correct basis as you enter the sale in the spreadsheet-like, "fill in the boxes" default TurboTax entry form.  Press "Continue" when you've entered the 5 pieces on information.  You are done.

(I'm assuming, of course, that you DO KNOW your correct basis for the shares sold.)

Tom Young.

Shares to cover

[abhiverma812]

Hey,

Thanks for replying. I have few quick questions:

1. Regarding below statement you made.

Since it's a Box B sale - basis not reported to the IRS - you simply enter the correct basis as you enter the sale in the spreadsheet-like, "fill in the boxes" default TurboTax entry form.  Press "Continue" when you've entered the 5 pieces on information.  You are done.

By spreadsheet-like, "fill in the boxes" default TurboTax entry form are you trying to refer to below?
Box 1a Description
Box 1c Date Sold

Box 1b Date acquired

Box 1d Sale proceeds

Box 1e Cost or other basis

2. To compute cost basis: I do have Employee stock plan release confirmation from Etrade which list total sale price (for stocks sold for sell-to-cover), total tax and fee. So should my cost basis be total sale price + fee?

3. When I click "continue" from page shown in #1 above I get following question:

 "Was this a sale of employee stock"?

Sales from employee stock plans, including ESPP, NQSO, ISO, RS and RSU plans often require special handling.

Option 1: Yes, this is stock that was acquired through an employee stock plan

Option 2: No, this is not employee stock

Should I click option 1?

[Critter-3 · Accepted solution]

Yes to option 1  and no to including the broker fee in cost basis.  When this is done the form 8949 should show a loss on the sale in the amount of the broker's fee.