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rena7
New Member

RSU shares sold to cover taxes only - 2024 TurboTax prompts

I'm entering the RSU sales listed on my 1099-B form.  Because I'm not sure if the cost basis reported is actually correct, I decide to check the box that says "The cost basis is incorrect or missing on my 1099‑B". That leads me through a series of guided prompts. Then on the screen titled "Tell us about your RSU sale", the instructions say this:
"Make sure you only enter the portion of the shares you sold. Your RSU sale will include a portion of shares sold and a portion of shares traded to pay for the taxes withheld. We'll ask about the shares traded for taxes later."

 

In this particular transaction that was reported on my 1099-B, 17 total shares were vested/released and 9 shares were sold automatically to cover taxes, but I did not sell any shares myself. The online form won't allow me to enter 0 in the "Number of shares sold" box. So instead I try to enter the number that was sold for taxes, 9, which seems to be not following what the instructions said, but like I mentioned it won't let me enter 0. 

 

After that, I'm taken to a screen title "Let's get some purchase info about this RSU sale" where I enter the "Total shares vested/released" (17) and "Shares withheld (traded) to pay taxes" (9) and submit the form to continue. I'm getting error notices on the following pages indicating that I haven't entered enough shares, which makes sense because the system thinks I sold 8 shares (17 minus 9 = 8), but on the very first screen I had entered 9. 

Long story short, what is the correct way for me to fill out these prompts accurately? I don't want to get taxed on shares I haven't sold yet. 

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2 Replies
KrisD15
Employee Tax Expert

RSU shares sold to cover taxes only - 2024 TurboTax prompts

To clarify, when you say 17 vested/released do you mean sold or vested? 

If only vested, the income those shares represent will be included as income on your W-2. They would not be reported on 1099-B.

 

If this is the case, the value included as income is the basis of the stock when you sell in the future. (also the value for the stock which was immediately sold) Often the employer will list the value in Box 14 on your W-2. 

 

If shares were sold immediately to cover the taxes on the vested shares, only the shares sold would be reported as income. 

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rena7
New Member

RSU shares sold to cover taxes only - 2024 TurboTax prompts

17 shares were vested. 9 shares were sold immediately to cover taxes.

I have dozens of these lots over the course of the year that I'm going to have to enter. Most of them are like the situation above where I didn't take an action myself, but it was automated. There are a small handful of transactions where I actually did sell shares myself. All of the above will be mixed together into one number on my W2, so looking at my W2 isn't very clear or helpful, not to mention I also have NQSO sells that are probably also mixed into another area of the W2 as well.

 

You're right, the 8 remaining shares from the above lot, which were not automatically sold, are not included on my 1099-B. How do I ensure that I don't get taxed for the 9 shares that were sold automatically? If those are on the 1099-B, wouldn't the government assume that as stock sale income (when in reality it's not)?

Or back to my original question, how do I fill out the online TurboTax prompts correctly? I'm not a tax expert, so I like the "dummy guide" TurboTax question prompts, and I trust that TurboTax can sort this out accurately. But like I mentioned previously, it wasn't allowing me to answer "0" to the question of how many shares did I sell aside from the shares for taxes.

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