3

I was granted RSUs that vested 1/3 per year, over 3 years. From E*Trade I have:

  • 2016, 133 Shares Vested, 89 Shares Transferred to me, Tax Paid: $3,424.52
  • 2017, 134 Shares Vested, 90 Shares Transferred to me, Tax Paid: $4,795.56

In 2017 I sold all of these, with proceeds of $7,814.83 and $10,709.51 respectively.

Since the original shares were already taxed (I vested 133 and 134, but x-shares were sold for tax purposes, noted above), do I put a cost basis of $0 on the remaining proceeds I received after selling what was left over?

Update

For completeness, here's my RSU history and how I filed:

Vesting #1 | 133 Shares
------------------------
Vest Date:    07/16/2016
PPS at Vest:  $77.83

Shares Assigned:           89
Shares Witheld for Tax:    44
Total Tax Paid (at vest):  $3,424.52
Cost Basis:                $6,926.87

Sale Date:    02/15/2017
PPS at Sale:  $87.95


Vesting #2 | 134 Shares
------------------------
Vest Date:    07/16/2017
PPS at Vest:  $108.99

Shares Assigned:           90
Shares Witheld for Tax:    44
Total Tax Paid (at vest):  $4,795.56
Cost Basis:                $9,809.10

Sale Date:    08/17/2017
PPS at Sale:  $116.47
3

For RSUs, the cost basis should be the fair market value (FMV) of the shares on the day they vest. This should be listed on your 1099-B from E-Trade, but perhaps not. If it's missing or $0, you'll need to adjust your basis to avoid being double taxed. You should have some kind of records to determine the FMV, for example payslips or you should be able to back-calculate it from your W-2 (because it's included as part of Box 1).

  • 1
    I've used e-trade for all my RSUs and they never give me a cost basis. Rather then trying to back-calculate from the W-2, I've always just used the share price on the day they vested, which has been close enough. – D Stanley Feb 21 '18 at 14:09
  • @DStanley I'm surprised they're allowed to do that, given the recent cost basis reporting legislation. Share price on the day they vest seems like a reasonable approach. – Craig W Feb 21 '18 at 14:25
  • I'm double-checking my tax forms, but this along with @DStanley's comment just took me from ($2800) owed to $3,000 in refund (we were hovering about $7,000 over the income limit for several tax breaks). – MrDuk Feb 21 '18 at 15:07
  • @MrDuk I would double-check the math - A 5,800 swing in tax seems high after eliminating part of the $18,500 in income, unless you actually had a loss after adding the cost basis and/or are in a high tax bracket. – D Stanley Feb 21 '18 at 15:20
  • I updated my question with a more complete picture of my filing - if someone could maybe take a second peak to verify I'm not completely misunderstanding something? – MrDuk Feb 21 '18 at 15:20

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