Solved: Need guidance if I entered RSU with shares with-held properly since after I input data taxes owed went up.
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New Member

Need guidance if I entered RSU with shares with-held properly since after I input data taxes owed went up.

Spouses W2 box 12c reports FMV of all shares released on vesting dates.   I understand this is the value of all shares being reported as ordinary income.  He had shares with-held and sold the remaining  net shares.  The 1099B under Short-term noncovered securities reports the net shares with Gross valued at FMV time of sale and cost basis at FMV time of release.  By entering the data as is, am I correctly reflecting that shares were with-held but we owe money on short-term capital gains?
Also, 1099B in short term Covered securities shows  what appear to be reinvested dividend shares.  The cost basis is the same as reported on a 1099DIV as ordinary dividends.  It seems like double taxation.  Not sure how to enter the 1099B portion.
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Level 12

Need guidance if I entered RSU with shares with-held properly since after I input data taxes owed went up.

"The 1099B under Short-term noncovered securities reports the net shares with Gross valued at FMV time of sale and cost basis at FMV time of release.  By entering the data as is, am I correctly reflecting that shares were with-held but we owe money on short-term capital gains?"

I'm surprised that the 1099-B reports any basis at all but based on what you've said here then the answer to your question is "Yes".

"Also, 1099B in short term Covered securities shows  what appear to be reinvested dividend shares.  The cost basis is the same as reported on a 1099DIV as ordinary dividends.  It seems like double taxation."

No.  Since the trade is being reported as "covered" your basis in each lot should be the same at the amount of dividend that was reinvested.  In other words the basis is subtracted from the proceeds to come to a gain or loss figure.  Only if the basis was listed as $0 would it be "double taxation" as you'd report the dividend as income when you enter the 1099-DIV and then you'd report an over-statement of "gain" when you entered the 1099-B.

Tom Young



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4 Replies
Level 12

Need guidance if I entered RSU with shares with-held properly since after I input data taxes owed went up.

"The 1099B under Short-term noncovered securities reports the net shares with Gross valued at FMV time of sale and cost basis at FMV time of release.  By entering the data as is, am I correctly reflecting that shares were with-held but we owe money on short-term capital gains?"

I'm surprised that the 1099-B reports any basis at all but based on what you've said here then the answer to your question is "Yes".

"Also, 1099B in short term Covered securities shows  what appear to be reinvested dividend shares.  The cost basis is the same as reported on a 1099DIV as ordinary dividends.  It seems like double taxation."

No.  Since the trade is being reported as "covered" your basis in each lot should be the same at the amount of dividend that was reinvested.  In other words the basis is subtracted from the proceeds to come to a gain or loss figure.  Only if the basis was listed as $0 would it be "double taxation" as you'd report the dividend as income when you enter the 1099-DIV and then you'd report an over-statement of "gain" when you entered the 1099-B.

Tom Young



View solution in original post

New Member

Need guidance if I entered RSU with shares with-held properly since after I input data taxes owed went up.

1099s are from Morgan Stanley, maybe they keep track of cost basis?  Don't know, this is my first time dealing with this.  Anyway thanks for your help.
Level 12

Need guidance if I entered RSU with shares with-held properly since after I input data taxes owed went up.

I expect the reason they reported the security as "noncovered" is that way they could inform you of the basis right on the face of the 1099-B.
New Member

Need guidance if I entered RSU with shares with-held properly since after I input data taxes owed went up.

I will need to go educate myself on covered vs noncovered!  Thank you again.
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