Dear Experts,
Need your guidance with following scenario -
I got 10 shares from my company as RSU. My broker sold 4 of them for tax purposes. This information was reported back to my employer which means my W2 reflects additional income as well as tax deducted.
I got 1099B from broker in which cost or other basis is mentioned 0. Box 12 indicates "Basis Not Reported to the IRS"
My question is -
1) Do I report this stock sale to IRS?
2) If yes, when reporting what should be my "Cost or Other basis"? is it 0 or the actual amount I got when my RSU vested?
Any guidance will be highly appreciated.
P.S. Similar questions have been asked earlier but I wanted to be clear. Apologies if you feel this duplicate.
Thanks
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1. Yes the sale was reported to the IRS, just not the basis.
2. Your basis is the amount that was added into your income on your W2 for those 4 shares.
The broker just did not know what your employer did so no basis was reported. We are always glad to help!
I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s. This will protect you down the road as proof of your basis in your various investments. As you go through life, rollovers, RSU sales, and more will be captured for you.
You will need to make note of how many shares you received and the amount on your W2. You will continue gaining shares. When you sell, you will have different basis prices for different shares.
When you do sell your RSU, you can then decide if you are selling LIFO, FIFO, or lots. Your notebook will be invaluable with knowing what was first, the order, the basis, and the lot size.
For example: If all 10 shares of the RSU are shown in your W2, the remaining 6 shares and their balance need to be captured and kept for the future.
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