-When some of my RSU were sold on vesting day automatically by Fidelity to cover taxes, will the remaining amount left over from the sell be considered as a short term gain?
-Should my total cost basis be $0 for these tax related RSU sells?
-If multiple RSU grants vested on the same day and each grant had some shares sold to cover taxes, can I consolidate and report all the sells on that day together as a single batch?
Thanks.
the shares that were delivered to you on that date have a cost basis equal to the price of the stock on that date
Until you sell the shares that remain, there is no taxable event. You will receive a 1099-B when you do that.
ps - the shares that were sold to cover the taxes have no tax impact to you. Look at your W-2; the value of ALL the shares that vested is taxable income to you and should be part of your wages.
The cost basis (box 1e) on my 1099-B is $0 for all the shares that were sold automatically by the brokerage to cover taxes on the vesting day.
Is this cost basis wrong?
How do I compute the quantity of shares that needed to be sold to cover the federal tax?
Thanks.
let me use an example and see if this works out.
Let's say I had 100 RSU's where the restriction ended in 2020. On the day the restriction ended the stock was selling for $20 per share. Therefore my W-2 should have an additional $2000 (100*20) under 'wages'.
The federal, state, social security and medicare withholdings on my paycheck were $400. The brokerage company sold 20 of the 100 shares to cover the taxes ($20 * 20 shares) leaving me with 80 shares with a cost basis of $20.
the cost basis is 80* $20 or $1600.
Given this example, there is nothing on the 1099-B, but there is $2000 on my W-2.
Now let's say I went ahead and sold those shares the next day at $21 per share. I received $1680 in cash ($21*80) and have a gain of $80 ($1680 - $1600). That $80 is a short term gain and would be reported on my 1099-B.
does that example make sense?
I am not clear if you are holding any of the shares anymore......what is in box 1D?