This is why your employees gets their taxes filed incorrectly... 21 Feb 2011
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Restricted Stock Units (RSUs) "I am filing a return for someone who received Restricted Stock Units (RSU's) from their employer. The RSU's were taxed at the time they vested, and were "sold to cover." The RSU value at vesting is included on her W-2 as income in Box 1 ($9,000). She also received a 1099-B from her investment company showing Cost Basis of $5,300 and Sales Proceeds of $5,000. I understand that the Cost Basis that must be reported on Schedule D is the W-2 amount of $9,000. This results in a net capital loss on her Schedule D of $4,000 ($9,000 - $5,000). Is that correct??? FYI - this is the only investment activity for the year. thanks!!!" http://bit.ly/ec1zVL
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Am curious to the correct answer - I speculate its a $300 capital loss. The implication is that some, not all, of the RSUs were sold at time of vesting ("sold to cover"), with the proceeds being $5,000. The difference between the $5,000 and the $5,300 would presumably be trading costs (i.e., commissions) and/or fluctuation in valuation between company and actual proceeds in market.
Correct. The cost basis applicable to the sale is the $5,300, creating a $300 capital loss. The loss could be a combination of trading fees and the difference between the FMV at vesting/delivery and the sales price. The balance of the shares retained will have a basis per share equal to the FMV at vesting/delivery. Just take the ($9,000 W-2 amount * shares retained/total shares vested)