AMT

[Dino_Russo]

I believe I entered my 1099B data correctly for RSU sales during 2021.  However It appears as though something is very wrong.  AMT was triggered and my AMT income is ~$80K more than my W-2 income even though my W-2 includes the RSU vested amounts.  Note that it is not due to gains as the actual sales show a net loss.  The RSUs were worth ~$80K so it looks like they were treated as income twice!   

[FangxiaL]

You need to make adjustments to the cost basis of the RSUs sold. You should have supplemental information on the RSUs. Use that info to adjust the cost basis to avoid double taxation.

Log in to your brokerage account and look for supplemental information on your RSU transactions. When you enter the 1099-B into TurboTax, make sure to make adjustments to the cost basis to avoid double taxation. 

Follow these steps to enter: 

With your federal tax return open:

1. Go to Income & Expenses > Investment Income, click on Start or Revisit next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
2. On the next screen, answer Yes to Did you sell any of these investments in 2021?
3. Select Stocks, Bonds, Mutual Funds and Continue
4. Select I'll type it myself on the screen that says Let's import your tax information and enter the Name of the brokerage or bank
5. Select Yes to Do these sales include any employee stock?
6. Select Enter one by one on the next screen 
7. In the Sales info section, select RSU as the type of investment you sold
8. Make sure to check the box The cost basis is incorrect or missing on my 1099‑B below Box 1e on the screen when you enter your sale transactions. You can adjust the cost basis to avoid double taxation.

[Dino_Russo]

The basis is on my 1099-B and is accurate; they were entered as described. 

However, when RSU shares vest they are treated as ordinary income.  The value on the vesting day has been added into my W-2 wages.  Some shares are sold in order to pay tax (also on W-2 in Fed Inc Tax WH).  Then there is capital gain/loss at the time of actual sale.  

So, it looks like the value of the shares are in my W-2 wages but also being counted again due to the 1099-B calculations.  Basically, Schedule D looks correct (minor loss), but Schedule D AMT is showing a Net Capital Gain equal to the total sales price of shares.  This is triggering additional tax even though the income is already shown in my W2.

[MarilynG1 · Accepted solution]

You nearly always have to adjust the Cost Basis on RSU sales on your 1099-B entry.   Brokers are only required to report your "out of pocket" basis.  For an RSU that's $0. 

The problem may be that you are using the WRONG BASIS to report the sale. That's why you are getting a "double income" effect. This may also be the issue with your AMT Capital Gains. 

Click this link for more info on Adjusting Cost Basis for Employee Stock Sales.