Cost Basis Needs Adjusted for Ordinary Income - how?

[katzspur]

My previous employer awarded RSUs up until I retired in 2017.  I never did anything with them as they still needed to vest.  The company was bought/merged with another company in 2018 and I believe all the outstanding RSUs were fully vested in 2019 under the new company.  At that time I owned 172 shares (9 different CUSIP numbers from 2016 to 2019)) of the new company. I sold all the shares in Dec 2020.  The tax info I received says the cost basis on this statement has not been adjusted to include the ordinary income component.   

Do I simply add the Box 1 info from the 2020 W-2 to the overall cost basis on the 1099?  Ex. $1000.00 cost basis plus $250.00 on the W-2 makes my cost basis $1250.00?

Or do I need to determine the ordinary income from the previous year's W-2s and add them to each year that's listed on the 1099B?  Ex . 3/16 - cost basis is 125.00 and the 2016 W2 shows $5.00 which would make my cost basis 130.00? 

Or is there another method?  

Thanks. 

[AmyC]

Let's start simple: All the RSU vested at once. This means they will all be together in the W2 box 1 the year they vested for the main basis. Your W2 issuer will have the breakdown of the information. Verify when they vested and the amount.

Next, you may possibly have received some dividends before vesting that were in your W2 box 1. This is not as common

Next, you will want to add any cost of purchase and sale to the basis.

[katzspur]

Thanks for the help but I'm still not fully tracking with your answer.  I now have the RSU vested paperwork showing grant and vest dates with prices, taxes paid and etc...for all the years (2016-2019) listed on my 1099-B.  

The RSU paperwork 2019 shows 26 of 65 units vested with the fair market value ($650.00) which matches the 2019 W-2.   10 of the 26 vested units were withheld for taxes leaving a net of 16 units.  The 1099-B shows the sale of those 16 units and the cost basis as $412.00.  

Based on what you provided (add any cost of purchase and sale to the basis), I'm not sure exactly what I need to add to make the adjustment.  

Thanks again for your help. 

[katzspur]

I'm still needing assistance with the question for how to adjust the cost basis of the stock.  @AmyC  answered by TomYoung 

[AmyC]

2019 So 26 shares- 10 sold to cover taxes leaves 16 shares in your portfolio.

Cost basis $412 on 1099B-  which is often wrong because the employer may not have shared that they were upping your income.

FMV $650 which matches the W2 income.- Winner

The correct cost basis will be $650 plus any sales expenses.

To determine sales expenses, find gross proceeds minus net proceeds for that transaction.

New basis = 650 + expenses.