Trying to understand gain on RSU transaction from Fidelity

[MattKhat72]

I'm doing a friend's taxes and she had RSUs this year. I got the 1099-B from Fidelity that included the supplemental information schedule. This is the screenshot below. On the supplemental schedule on the 3rd row (in the red box) there is a sale of 12 shares (these were shares sold to pay taxes on an RSU vesting). The acquisition date is 6/25/21 instead of the actual acquisition date of 9/1/22 (Fidelity says that a wash sale triggered these RSU tax shares to actually be sold from a lot received in 2021. The wash sale transactions are in the purple box and are a sale of Wayfair stock that was acquired in 2021 so they are NOT part of the 2022 RSU transactions.) The proceeds ($601.37) and ordinary income ($612.60) amounts are correct. The cost basis ($3,557.70) could be correct since it's based on Wayfair stock acquired in 2021when the price was high but I can't confirm that the cost basis is accurate. Fidelity also calculated a wash sale disallowed of $2,956.33 and a loss on the sale of $2,956.33 (loss wiped out by the wash sale).

I used the supplemental schedule to enter all the Wayfair stock sales (see the screenshot below) and much to my surprise when I entered the information for the sale of 12 shares (see the row in the red box below), instead of getting no gain or loss, I'm getting a gain of $2,944.00 according to TurboTax.  I am not a wash sale expert by any means but I'm assuming the gain has something to do with the disallowed wash sale. Can someone explain how this would have a gain of almost $3,000.00?

Thanks for your help and guidance.

[GeorgeM777]

The sale of the 12 shares Wayfair LLC should be a loss because the cost basis was $613, and the sales proceeds were $601 resulting in a net loss of $12.  When determining whether that $12 loss is disallowed because of the wash sale rule, you need to determine whether the same or substantially same security was purchased during the wash sale period.  The wash sale period is 30 days before, and 30 days after the sale of the security in question.  That is, if you sell a security at a loss, and then you buy the same, or similar security, with that 61-day window, you will trigger the wash sale rule.  The wash sale rule applies across all of a taxpayer's accounts wherever they are held.  

Regarding the sale of the 12 shares of Wayfair, assuming that loss is disallowed because of the wash sale rule, enter the amount of the nondeductible loss as a positive number in column (g).  Thus, you will need to change the amount in column g to $12.  Code W can remain in column f because you are denoting the loss is disallowed because of the wash sale rule.  

Regarding the codes B and T in column g, it's not clear whether you needed to adjust the basis of the 12 shares of Wayfair, or whether the gain or loss is incorrect.  Essentially, when wash sales losses are involved, taxpayers need to track their basis in subsequent purchases and make the appropriate adjustment on Form 8949.  Brokerage firms may not always accurately track changes in basis as a result of wash sales.

[MattKhat72]

Thanks for your reply George. I agree that there is a loss on the stock. But, according to the supplemental schedule provided by Fidelity the loss they calculate is actually $2,956.33 because they say the cost is $3,557.70. When I entered the information into TT for this sale I entered the $3,557.70 cost but TT calculated the cost as $613. I assume it did this because the sale was to pay RSU taxes. So to me a stock sold for $601.37 with a cost of $3,557.70 should be a loss of $2,956.33 which is what Fidelity shows on the supplemental form. Then if the wash sale disallows the loss then I would expect the loss to be zero, not a gain of $2,944. This is the part I don't understand.

[fanfare]

when code B is used For Box A or Box D, do not change the basis shown on the received document (3557.70).

make an adjustment in col(g) to get the correct gain/loss.

when Code B is  entered for Box B or Box E. enter the correct basis in col (e). and 0 in col (g)

you say Turbotax entered 613.

when adjusting the basis with W-2 for RSU, that is done by the tax filer, not TurboTax.

anyways, why are you entering code B and/or T in the first place?

its not clear; if stock plan lot detail did not go to IRS, you would use Box C or Box F

@MattKhat72 

[MattKhat72]

Actually, most of the information on the RSU stock was imported into TurboTax from Fidelity. The only thing I entered was the information that's on the supplemental schedule. I went through the TT step-by-step questionnaire so that's where the adjustment codes came from.