Take the 2-minute tour ×
Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It's 100% free, no registration required.

I had some RSUs where some amount (call it V) vested. Then tax was taken and a smaller amount (call it R) were released, which I sold.

I'm using E*Trade, and HR Block have imported my 1099-B form.

The question I have is what should I say the taxed paid was? The 1099-B only talks about the value of the released shares - I.e. after I paid tax. I'm also asked for the cost-basis of the shares which I don't understand how to calculate.

How should I calculate how much tax to say I paid, and the cost basis? Also, this is reported already on my W-2, so do I need to take that into account too?

EDIT: I think it may matter that I've not held on to any of these shares for more than a year, I typically sold them within days of them being released.

share|improve this question
add comment

2 Answers

Here's an article on it that might help: http://thefinancebuff.com/restricted-stock-units-rsu-sales-and.html

One of the tricky things is that you probably have the value of the vested shares and withheld taxes already on your W-2. This confuses everyone including the IRS (they sent me one of those audits-by-mail one year, where the issue was they wanted to double-count stock compensation that was on both 1099-B and W-2; a quick letter explaining this and they were happy).

The general idea is that when you first irrevocably own the stock (it vests) then that's income, because you're receiving something of value. So this goes on a W-2 and is taxed as income, not capital gains. Conceptually you've just spent however many dollars in income to buy stock, so that's your basis on the stock.

For tax paid, if your employer withheld taxes, it should be included in your W-2. In that case you would not separately list it elsewhere.

share|improve this answer
add comment

Your employer should send you a statement with this information. If they didn't, you should still be able to find it through E*Trade. Navigate to: Trading & Portfolios>Portfolios. Select the stock plan account. Under "Restricted Stock", you should see a list of your grants. If you click on the grant in question, you should see a breakdown of how many shares were vested and released by date. It will also tell you the cost basis per share and the amount of taxes withheld.

You calculate your cost basis by multiplying the number of released shares by the cost basis per share.

You can ignore the ordinary income tax and taxes withheld since they will already have been included on your W2 earnings and withholdings. Really all you need to do is report the capital gain or loss from the cost basis (which if you sold right away will be rather small).

share|improve this answer
add comment

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.