How to enter adjusted cost basis for RSU sale?

[sdtraveler]

Hi,

We sold restricted stock units last year and received both a 1099B and an E*TRADE Stock Plan Transaction Supplement. The supplement includes adjusted cost basis numbers which the 1099B sent to the IRS does not. However, I can't find the field in Turbotax Premier to enter this information, there is only a field for Cost or Other Basis. I've browsed through posts in this forum and found answers from 2019 showing what to click on that don't seem to help. Any assistance would be greatly appreciated. Thanks!

[HelenC12]

You only enter the information from the 1099-B form. The supplemental information is for your records. You may need it to calculate your adjusted cost basis. Since the gain on that stock sale was included as income on your W-2, to avoid double taxation:

• You will need to change the stock basis on the date of the sale, to the price on the date of sale.  
• The result is zero gain or a minor loss due to brokers commission/fees.  
• The IRS will expect to see that information on your tax return.  

To enter your 1099-B form, see Where do I enter a 1099-B?

For additional information, see the TurboTax article: Non-Qualified Stock Options.

[sdtraveler]

Thank you!

This is where I'm confused about the double taxation part. Shouldn't I be doing something with the adjusted cost basis to avoid double taxation? My understanding is that the adjusted cost basis is related to the stock sale income included in W2 box 1. Also, past versions of Turbotax had a field to enter the adjusted cost basis.

Thanks,

[HelenC12]

Regarding "doing something with the adjusted cost basis", yes, you need to calculate your adjusted cost basis.

• The 1099-B form has your "cost" basis and you need to adjust it by the price or cost on the date of sale which will result in a zero or minor loss per my instructions in my original answer.
• Note: Do not change the proceeds amount. That is reported to the IRS and must match the figure they have.

My original instructions: 

• Change the stock cost or other basis on the date of the sale, to the price on the date of sale.  
• The result is zero gain or a minor loss due to brokers commission/fees.  
• The IRS will expect to see that information on your tax return.  

Currently, as you enter your 1099-B form, Box 1e in TurboTax reads, Cost or other basis. The "other basis" is your adjusted basis. It's not reported as a separate item.

[gitbisect]

Thanks for the info about entering the adjusted cost basis.

For anyone doing RSUs for your 2023 taxes where your company paid taxes as ordinary income when you received the shares and your reported cost basis is showing as $0. The Turbotax interface is a bit confusing, but I think I figured it out:

1. Connect your trading account or enter your 1099-B sale info.
2. If you imported it, you'll likely need to set the "type of investment" select box to RSU.
3. Box 1e will be $0 (what's shown on your 1099-B)
4. Check the box for "The cost basis is incorrect or missing on my 1099-B"
5. When you go to save this sales data, Turbotax will ask you for your adjusted cost basis and you can enter the number from your supplementary info there.

You'll need to do this for every RSU sale.

[jefft711]

Thanks for this helpful information on this topic. I have a follow up question.

You said, "For anyone doing RSUs for your 2023 taxes where your company paid taxes as ordinary income when you received the shares and your reported cost basis is showing as $0."  

Is the treatment the same for RSAs? If so, I have some follow up questions on how to handle cost basis on RSAs.

What if my company didn't pay taxes on the RSAs when they vested? Is the treatment the same?

In other words, I have RSAs that I sold in 2023. My Etrade supplemental information document shows an adjusted cost basis that results in an adjusted loss.  But since no taxes were withheld at time of vesting, do I still report the adjusted cost basis? Or do I report the cost basis as 0?

[DaveF1006]

Yes, the treatment is the same for RSA whether or not your employer withheld taxes. Report the adjusted stock basis as it is reported on your E-Trade 1099B.