Entering RSU transactions in TT: tax withholdings and the balance

[CM_VA]

Hi everyone,

I have several sets of RSU stock options that I sold, each resulting in both a transaction where shares were sold for taxes and a transaction reflecting the shares we sold to keep the profit. In my 1099-B, the transactions for the shares that were sold to pay taxes are listed as “Noncovered Securities/Form 8949 Box B”, and the transactions from the same release where the shares were sold for profit are listed under “Covered Securities/Form 8949 Box A”.

My problem is entering this fact correctly in TT. When I enter my 1099-B transaction for the shares sold for taxes, falling under Form 8949 Box B, TT asks me how many shares were in the entire release and how many of those shares were withheld for taxes--even though the amount withheld for taxes IS the transaction I am recording. Then later when I fill in details for the other segment of the release, by entering the 1099-B line-item for the balance of shares that were sold for profit (and specify that these are RSUs that fall under Form 8949 Box A), TT again asks me to specify the size of the entire release and how many shares were withheld for taxes. When all the transactions are compiled, TT believes I had exactly twice as many RSUs as I did.

Example, if I am being unclear: Say I had 100 RSU shares in the release valued at $1 each, 30 sold immediately for taxes and 60 sold shortly thereafter for profit. When I enter the line-item from the 1099-B under “Noncovered Securities (Form 8949/Box B)” for the 30 shares, TT then prompts me to record the size of the entire release (100 shares) and how many were withheld for taxes (30). Then when I go to enter the 1099-B line-item from my “Covered Securities (Form 8949/Box A)” for the 60 share segment, TT again asks me to fill in the release details, so I again enter that the entire release was 100 shares and 30 were withheld for taxes. In the end, the TT “Summary of Compensation Income From Employee Stock Transactions” tells me I have $200 in Additional Compensation Income rather than $100—it is recording both of those "releases" as unique entities, rather than allowing me to tie them together somehow to reflect that they are two different types of transactions from the same release.

As I enter my RSU sales in TurboTax Premier, how do I correctly complete the boxes in the TT “Enter Vesting (or Release) Information” screen to record first the Noncovered/Box B transaction that was withheld for taxes and then later the Covered/Box A transaction that was sold for profit from the same release? This screen seems to be the root of the issue.

I am sure I am not the only one in this situation! Thank you!

[GeorgeM777]

You might consider just reporting your RSU sales as you would a regular stock transaction.   Whether entered as an RSU in TurboTax or a regular stock trade, the result on your tax return should be the same provided you have your correct cost basis, holding period, and sales proceeds.

Your per share cost basis is the total value of the RSUs on the day they vested, divided by the total number of shares you received--this includes the shares that were sold to cover the tax withholding.  As you noted in your post, your employer sold some of those shares for tax purposes leaving you with the remainder.  Your per share cost basis does not change. Thus, if you know your per share cost basis, you can enter that information into TurboTax and report the sale of your RSUs as a regular stock trade.  

Many times, when the employer sells some of the RSUs, those sales do not result in a gain or loss.  However, if your sold to cover shares did result in a gain or loss, just report those sales as a separate transaction in TurboTax.  Again, if you prefer, you can enter all of these transactions as regular stock trades and avoid the screens that relate to RSUs. 

@CM_VA 

[CM_VA]

Thank you for your thoughts, George (and for confirming that the step-by-step TT instructions for RSUs aren't as beneficial  as they should be--considering this is why I upgraded to Premier in the first place!). I assume I must add each item shown on my 1099-B onto Form 8949, including the Noncovered/Box B transactions (which are the transactions that were sold to pay taxes), correct? Therefore I'm not even sure how I would do as you suggest.

It is easy for me to find the cost basis of both types of RSU transactions (those for taxes and for profit)--I have them all on my broker statement. It's making them fit into TurboTax where I am struggling! I typically count on TT's step-by-steps to do my taxes, but in this case I find I'm overriding the questions to get the results that seem like the legal and accurate ones. If I were better at understanding the forms I would have just dropped TT and done that days ago, and we would not be having this conversation.
At this point here is the hack that seems to be working: I am entering all the 8949 Box B transactions (those sold for taxes) with the number of shares in this transaction as the "Total Shares Vested for this Release" value (30, in my example above, rather than 100), and putting "0" as the "Shares Withheld to Pay Taxes" (ironic, since these are actually the shares that were paid for taxes), and I'm doing the same thing for the 8949 Box A transactions (those whose money we kept). Ignoring the larger questions about the whole release and entering each transaction as a separate individual unit (with the correct dates and basis amounts, of course) results in an accurate depiction of how much my total RSU Compensation Income was (as specified in Box 14 of my W2).

But it makes me verrry uncomfortable to deliberately mis-answer TurboTax's questions in order to get the accurate numbers. They should KNOW that these days, many Noncovered/8949 Box B transactions might  be RSU-withholding sales...and frame their questions accordingly! (If I could only find a place to submit issues! Another gripe.)