Sold stocks RSU and ESPP and reported in W-2 how can i avoid duplicated taxes

hany_mahir — Wed, 05 Jun 2019 21:55:51 GMT

You avoid duplicating income (and taxes) by using the cor...

TomYoung — Wed, 05 Jun 2019 21:55:52 GMT

You avoid duplicating income (and taxes) by using the correct cost basis when you sell. The broker is not reporting the correct cost basis, they only report your out of pocket cost of acquiring the stock so if you enter that 1099-B and don't correct it you do report the income twice: once as compensation and then again as an overstatement of gain.

The correct basis to use in these cases, on a per share basis, is the same per share "fair market value" used by the employer to calculate the compensation reported on the W-2. This number, on a per share basis, is the sum of your per share out of pocket cost to acquire the stock plus the per share compensation associated with that stock.

The easiest way to enter these trades and getting the correct basis reported is to use the default TurboTax 1099-B entry form. 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)

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

NOTE: TURBOTAX CHANGES THE SECURITY SALES INTERVIEW JUST ABOUT EVERY SINGLE YEAR. THE INSTRUCTIONS ON "HOW TO FIX" THE BASIS REFLECT THE STATE OF THE INTERVIEW FOR TAX YEARS 2016 AND 2017

topic Sold stocks RSU and ESPP and reported in W-2 how can i avoid duplicated taxes in Investors & landlords

Sold stocks RSU and ESPP and reported in W-2 how can i avoid duplicated taxes

You avoid duplicating income (and taxes) by using the cor...