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The vesting of an RSU is considered a compensation event. The compensation is calculated as:
(GROSS number of shares in the grant) x (per share "fair market value" at the date of vesting)
When you receive compensation from an employer, (you happened to receive that compensation as "stock", not "cash", but that doesn't change anything), the employer is required to withhold taxes. That's what those 3 shares were for. All this activity - compensation and taxes withheld - gets reported on your W-2.
What's important for you to understand is that your per share basis in the stock is the same as that per share "fair market value" at the date of vesting; your basis in the stock is not $0, even though that's probably what the broker reported on the 1099-B. (Brokers are only required to report your "out of pocket" costs in this situation and your out of pocket cost to receive the gross number of shares was $0.)
When you sell the stock that's a "capital" transaction and and you'll recognize gain or loss, just like any other stock. There's no need to use the RSU "step by step" interview. You'll simply tell TurboTax you acquired the stock on the vesting date. Using the "Stocks, Mutual Funds, Bonds, Other" interview enter the 1099-B as it reads on the default 1099-B entry form but then click on the "I'll enter additional info on my own" blue button. On the next page enter the correct basis in the "Corrected cost basis" box. The correct basis is (number of shares sold) x (correct per share basis, which includes the compensation per share)
TurboTax will report the sale on Form 8949 "as reported by the broker" but will put an adjustment figure into column (g) of the Form, a code "B" into column (f) of the Form, and the correct amount of gain or loss which includes the adjustment.
Tom Young
The vesting of an RSU is considered a compensation event. The compensation is calculated as:
(GROSS number of shares in the grant) x (per share "fair market value" at the date of vesting)
When you receive compensation from an employer, (you happened to receive that compensation as "stock", not "cash", but that doesn't change anything), the employer is required to withhold taxes. That's what those 3 shares were for. All this activity - compensation and taxes withheld - gets reported on your W-2.
What's important for you to understand is that your per share basis in the stock is the same as that per share "fair market value" at the date of vesting; your basis in the stock is not $0, even though that's probably what the broker reported on the 1099-B. (Brokers are only required to report your "out of pocket" costs in this situation and your out of pocket cost to receive the gross number of shares was $0.)
When you sell the stock that's a "capital" transaction and and you'll recognize gain or loss, just like any other stock. There's no need to use the RSU "step by step" interview. You'll simply tell TurboTax you acquired the stock on the vesting date. Using the "Stocks, Mutual Funds, Bonds, Other" interview enter the 1099-B as it reads on the default 1099-B entry form but then click on the "I'll enter additional info on my own" blue button. On the next page enter the correct basis in the "Corrected cost basis" box. The correct basis is (number of shares sold) x (correct per share basis, which includes the compensation per share)
TurboTax will report the sale on Form 8949 "as reported by the broker" but will put an adjustment figure into column (g) of the Form, a code "B" into column (f) of the Form, and the correct amount of gain or loss which includes the adjustment.
Tom Young
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