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No, when your RSUs are granted the trading company is told the effective cost basis, which is included in the tax docs they provide you and the IRS. But yes, t

by olliej 4y ago

No, when your RSUs are granted the trading company is told the effective cost basis, which is included in the tax docs they provide you and the IRS. But yes, the US tax code is absurdly complicated. A significant part of that is the result of lobbying by the likes of H&R Block, etc - because their business model depends on people being functionally forced to use tax prep companies.

refurb 4y ago
The cost basis for my RSUs is not reported to the IRS. There was no corporate lobbying behind that, just bad tax code that doesn't force brokers to report it.
- olliej 4y ago
  Huh, I'm fairly sure the IRS isn't just blindly trusting what people report as the cost basis, but maybe that only comes up during audits. But you understand that a lot of the documented reasons the tax code is bad, is lobbying by the tax prep industry, right? Their business model is built on it being more dangerous to do taxes yourself, than to pay them $50+, so they lobby against simplifications to the tax system, and similarly lobby to support laws that increase penalties, and ensure that new reductions aren't automatic.
  - refurb 4y ago
    The IRS does trust your cost basis, but I have no doubt there is some backend check that flags things that are wildly off of what is expected. But I don't think the tax prep industry lobbied for how RSUs cost-basis is captured. That's just a byproduct of the US tax code and requirements for reporting on 1099s from brokerages.
livueta 4y ago
I don't think that's always correct. Quoting from the cost basis portion of one of my combined 1099 packets: > Note: This information is not reported to the IRS. It may assist you in tax return preparation. They give me a 1099B that's all zero cost basis, then in a different part of the paperwork bearing that disclaimer give me a "supplemental" 1099B that includes cost basis. Dunno why, but the CPA I asked said it was all above-board and to calculate cost basis off of the supplemental info.

by olliej 4y ago

refurb 4y ago

The cost basis for my RSUs is not reported to the IRS. There was no corporate lobbying behind that, just bad tax code that doesn't force brokers to report it.

olliej 4y ago
Huh, I'm fairly sure the IRS isn't just blindly trusting what people report as the cost basis, but maybe that only comes up during audits. But you understand that a lot of the documented reasons the tax code is bad, is lobbying by the tax prep industry, right? Their business model is built on it being more dangerous to do taxes yourself, than to pay them $50+, so they lobby against simplifications to the tax system, and similarly lobby to support laws that increase penalties, and ensure that new reductions aren't automatic.
- refurb 4y ago
  The IRS does trust your cost basis, but I have no doubt there is some backend check that flags things that are wildly off of what is expected. But I don't think the tax prep industry lobbied for how RSUs cost-basis is captured. That's just a byproduct of the US tax code and requirements for reporting on 1099s from brokerages.

livueta 4y ago

I don't think that's always correct. Quoting from the cost basis portion of one of my combined 1099 packets: > Note: This information is not reported to the IRS. It may assist you in tax return preparation. They give me a 1099B that's all zero cost basis, then in a different part of the paperwork bearing that disclaimer give me a "supplemental" 1099B that includes cost basis. Dunno why, but the CPA I asked said it was all above-board and to calculate cost basis off of the supplemental info.