RSUs tax reporting question

[cargal]

RSUs are so dang hard to figure out in Turbotax!!

We have 3 lots that were vested in 2020 and sold in 2020.  I have 3 lines on our 1099-B, and a total (I cannot tell from the Etrade doc whether these were reported individually or as a summary item - the total line IS bolded though).

2 lots were sold to cover lots and sold at price A on 3/12/20

1 lot was sold at price B on 3/13/20

All 3 lots were sold at less than FMV, which was used for the W2; I recognize this becomes the basis for our shares when we sell them.

Questions:

1 - can I summarize all 3 as one sale, with an adjusted cost basis, and without going through the RSU step-by-step?  The step by step is...not helpful (I seem to lose the ability to adjust the basis when I click that "Yes" in response to the question "Was this a sale of employee stock?" - whereas if I say no, I can click that the cost basis on my statement is incorrect.).  I would prefer to just enter it as a normal sale, disregarding the fact that it's an RSU and lumping the 3 together, but I don't know if that's against tax regulations.

2 - given that all 3 lots were sold at less than what was on our W2, I should expect to see a loss, even for the sell-to-cover lots.  True?

Thanks.  Just so frustrated.

[DavidD66]

Yes, if you sold for less than the fair market value on the date they vested (which is the value used to determine income included in box 1 of your W-2, and your cost basis) you will a loss.

No you cannot enter as a single transaction as though it was a single sale.  You can enter it as a category total, but then you will have to mail a copy of your 1099-B to the IRS.

You do not need to go through the Employer Stock step-by-step for RSUs if you know the correct cost basis, and it was correctly reported as income and taxes were withheld.  

If you received a stock award (e.g. Resricted Stock, or RSUs), tax is assessed on the value of the stock on the day the stock vests/ is delivered.  That amount is ordinary income, and is included in Wages on Box 1 of your W-2 for that year.  Your cost basis is also the value of the stock on the day it vests or is delivered.  The problem is, brokers don't have (or don't report) that information.  If you know the amount that was added to your income, that is your actual cost basis.  In order to keep from paying tax on the stock award twice, you have to correct your cost basis.  To do so, go to that 1099-B transaction, and on the page with the Description, Date Acquired, Date of Sale, Sales Price, and Adjusted Cost or Other Basis, click on "I'll enter additional info on my own".  On the next page, enter the "Corrected cost basis"

[RogerMCarter]

@DavidD66 

My preparer is struggling with my complicated taxes which have RSU and ESPP. Fidelity did the 1099-B. It is not her fault. It says that we need to address the employee stock, but it doesn’t say how. Every year I go through this, but it is usually easy to figure out which items don’t have a purchase price associated with them. i was unable to find that this year. She is struggling too. It says I owe an astronomical amount of tax that can’t be right because it seems more than the profit I realized.

Can you take over my taxes please ? You seem to understand the problem and resolution.

Thanks.

[RogerMCarter]

@DavidD66 

[cargal]

Thanks!  Just to be crystal clear...  so I *cannot* summarize these into one line item (without having to mail my 1099B), but I *can* enter 3 separate line items.  I'll use the FMV at the time of vesting (IE - what's on my W2) to adjust my cost basis of each individual lot (and will have 3 adjusted losses).  There's no need to identify these as RSUs because the IRS doesn't "care" aside from them being reported correctly.

All true?

[DawnC]

I think the problem is that the cost basis needs to be adjusted as David explained above.   Right now, it is too low and may not be taking into consideration the compensation included on your W-2.   TurboTax does offer a full-service option, where a tax expert can file your return for you.   However, that option is only available through TurboTax Online.   It appears as if you are using the desktop software, which is a better option for reporting those ESPPs.    But, if you want to have TurboTax prepare the return, you don't really need the desktop version.  I  will include some links below regarding full-service and RSU entries in TurboTax.  

How to Report RSUs or Stock Grants on Your Tax Return

What are restricted stock units (RSUs) and how do I report them?

What is Full-Service - In order to use Full-Service, you have to be using TurboTax Live Online.

How do I switch from TurboTax CD/Download to TurboTax Online?