Do I use adjusted cost basis from 1099-B supplemental form?

[yatoshura]

My broker Fidelity automatically sold some of my RSU on the day of vesting in 2022 to cover taxes. I did not make any other stock transaction in the year. I received a 1099-B from Fidelity for the RSU sale which has a "cost basis" of $0 and proceed of $4000. Then I also received another 1099 supplemental form for the same RSU sale which has an "adjusted cost basis" of $3999. 

It seems like using $0 cost basis will count the entire $4000 proceed as a short term capital gain. However, using the $3999 adjusted cost basis will count the sale as a $1 short term capital loss. 

When I report the RSU sale with TurboTax, do I use the $0 cost basis or the $3999 adjusted cost basis? 

[DavidD66]

When RSUs vest (the stock is delivered) the entire amount is ordinary income.  Your employer must collect payroll taxes, or sell shares to pay it.  Since you are taxed on the entire amount, you basis is the amount that is added to your W-2 which you are taxed on.  If you retain the stock, any gains on the sale will be short term if you hold the stock one year or less, and long term if you hold it more than one year.

You definitely don't want to use $0 as your cost basis.  a $1 gain or loss on the sale of RSUs on the day of vesting is reasonable.  Use the $3,999 as your cost basis.

[fanfare]

Of course you use the adjusted basis of $3,999.

in earlier years you didn't get that document and had to figure it out for yourself.

@yatoshura