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> DO NOT FORGET TO ADJUST YOUR COST BASIS ON RSU SALES WHEN FILING TAXES Say more? Why would I ever want to adjust my cost basis to something other than the sh

> DO NOT FORGET TO ADJUST YOUR COST BASIS ON RSU SALES WHEN FILING TAXES Say more? Why would I ever want to adjust my cost basis to something other than the shares' FMV at vest (which, in my experience, is always the default)?

beau_g 3y ago
With my (and everyone else at my companies) setup with etrade, you get a 1099, and then later an addendum with the adjusted values. Turbotax by default tells you to enter the 1099 sales, and after entering and submitting each row, you see the chance to adjust the cost basis, which you must enter manually from the addendum. Perhaps other brokerages have a more elegant setup. If you don't adjust you will be double taxed. This would likely be obvious to you if you sold a lot of shares, but if you just did some small sales, I can easily see someone accidentally double taxing themselves.
- forbiddenlake 3y ago
  Very true for ESPP, but I haven't seen that for RSUs. Is your broker reporting the cost basis of the RSUs at $0? Otherwise why and how does the cost basis of an RSU even change?
  - brewdad 3y ago
    Yes. Etrade reports the cost basis of RSUs as $0 on the 1099. You then must manually adjust the cost basis using a second schedule that shows the value of the RSU already taxed as income at the time of vesting. If you don't make this adjustment, you will be paying taxes on thousands of dollars in "gains" that aren't actually gains and have already been taxed as income.
    - hamburglar 3y ago
      Fidelity does the same thing. Cost basis of RSUs shows 0 on the 1099 and you get a supplemental 1099 with adjusted cost basis. If you don’t take care to use the adjusted value, you will be paying both income tax and capital gains tax on the market value at vesting, instead of just income tax as you should.
- deleted 3y ago
  [deleted]
stouset 3y ago
In some company setups, your company reports the vested shares as income on your W-2. They also report your RSUs as having a $0 cost basis. This results in being taxed twice. E*TRADE at least provides an addendum that lets you know the adjusted cost bases to report to the IRS. In my case this happens for RSUs and—I believe—not for ESPPs which are reported correctly out the gate.

beau_g 3y ago

With my (and everyone else at my companies) setup with etrade, you get a 1099, and then later an addendum with the adjusted values. Turbotax by default tells you to enter the 1099 sales, and after entering and submitting each row, you see the chance to adjust the cost basis, which you must enter manually from the addendum. Perhaps other brokerages have a more elegant setup. If you don't adjust you will be double taxed. This would likely be obvious to you if you sold a lot of shares, but if you just did some small sales, I can easily see someone accidentally double taxing themselves.

forbiddenlake 3y ago
Very true for ESPP, but I haven't seen that for RSUs. Is your broker reporting the cost basis of the RSUs at $0? Otherwise why and how does the cost basis of an RSU even change?
- brewdad 3y ago
  Yes. Etrade reports the cost basis of RSUs as $0 on the 1099. You then must manually adjust the cost basis using a second schedule that shows the value of the RSU already taxed as income at the time of vesting. If you don't make this adjustment, you will be paying taxes on thousands of dollars in "gains" that aren't actually gains and have already been taxed as income.
  - hamburglar 3y ago
    Fidelity does the same thing. Cost basis of RSUs shows 0 on the 1099 and you get a supplemental 1099 with adjusted cost basis. If you don’t take care to use the adjusted value, you will be paying both income tax and capital gains tax on the market value at vesting, instead of just income tax as you should.
deleted 3y ago
[deleted]

stouset 3y ago

In some company setups, your company reports the vested shares as income on your W-2. They also report your RSUs as having a $0 cost basis. This results in being taxed twice. E*TRADE at least provides an addendum that lets you know the adjusted cost bases to report to the IRS. In my case this happens for RSUs and—I believe—not for ESPPs which are reported correctly out the gate.