Cost Basis for "RSUs Sold to Cover Taxes"

[rvr13]

I received 1099-B from Computershare Equate Plus for my company RSUs that has missing cost basis information in box 1(e).

I had a total of 21.554 RSUs that vested and 9.6663 shares were sold to cover taxes by my company.

The Fair Market value of each share at the time it vested was $262.6659

I selected "The cost basis is incorrect or missing on my 1099‑B" box and used Turbotax pompts to help me calculate my Cost Basis. However, Turbotax is calculating my cost basis incorrectly as $0.00. 

What will my actual cost basis be for this RSU sold to cover for taxes? How can I calculate it correctly so I don't report this income twice?

[ThomasM125]

The cost basis is likely close to the value of the proceeds from the stock sales so your gain should be minimal.

When you enter your Form 1099-B reporting the stock sales, you will see an option that says the cost basis is incorrect or missing on my Form 1099-B. It is on the screen where you enter the proceeds and cost basis. If you check that box, TurboTax will allow you to either enter the correct cost basis or will offer to help you determine what it is and then enter it for you.

Since you are dealing with restricted stock units (RSU's), your W-2 form should list the value of them awarded to you as wage income. If you divide that income by the number of shares awarded, you will know the cost per share that you can multiply by the number of shares sold to determine their cost basis for entry on the Form 1099-B entry screen.

[rvr13]

Hello Thomas, my W2 form does not show a separate line item for RSU, so I do not have information of the exact value of RSU awarded to me from my W2 wage income form.

I have transaction details from the brokerage that states that the value of each RSU at the time of vesting was $262.6659

Does that mean my Cost Basis will be :

No. of shares sold to cover for taxes (9.6663) X Value of each RSU at time of vesting ($262.6659) = $2539.007 ??

Please correct me if Im wrong.

[ThomasM125]

Yes, the fair market value would be the value of the shares given to you which would be added to your income on your W-2 form. Since you will pay tax on that, it becomes your cost basis of the shares sold, so you don't get taxed again upon their sale.

[rvr13]

Thanks Thomas!

Just to confirm, for this specific RSU transaction the Cost Basis will be :

FMV X Number of shares sold to cover taxes

or 

FMV X Number of shares Vested

?

[ThomasM125]

The first one, market value at vesting times the number of shares sold to pay the taxes. When you get done, the gain should be minimal, as you are selling shares soon after they are acquired.