What happens is when the restricted stock units (RSU's) vest, you receive compensation that is reported as wage income and entered on line 1 of your form W-2. Since it is wage income, you owe social security, Medicare and potentially income taxes on the compensation. Consequently, shares of the stock are "sold" to raise the money necessary to pay the payroll taxes. In TurboTax, you will enter your W-2 form and that will report the compensation and taxes withheld. In addition, you will normally receive a Form 1099-B reporting the sale of stock. The cost basis of the stock should be about the same as the sale proceeds since the stock was sold just hours or days after it vested. If there is a big disparity between the cost basis and sales proceeds, you may need to adjust the cost basis by adding the compenation from the RSU's listed on your W-2 form to the cost basis reported on the Form 1099-B, otherwise you may get doubled taxed on the ordinary income component of the vesting of the RSU's. You can follow these steps to adjust the cost basis reported on a form 1099-B:
What if I never received the 1099. Can I just enter the information from the RSU transaction advice? I am uncertain about the first section which asks Date sold (I use vesting date) and then # of Shares sold. Do I enter the entire RSU award that vested; i.e. 100 shares or do I just enter the sale for the shares withheld; i.e. 25 shares? Can I assume cost bases is generally the same as the fair market value at the vesting or do I go back to the original price when the award was granted?
Thank you for initially responding.