All rights reserved. Yeah. When you receive RSU shares, your "cost basis" in those shares is their market value on the day you received them. Then using the mechanism provided by TurboTax, enter the correct basis. Securities products offered by E*TRADE Securities LLC (ETS), Member SIPCor Morgan Stanley Smith Barney LLC (MSSB), MemberSIPC. There shouldn't be any guesswork involved, What is the cost basis for my RSU? Ones you dont even have to pay for. Dear experts, I sold my RSUs in ETrade in 2019. For completeness, here's my RSU history and how I filed: For RSUs, the cost basis should be the fair market value (FMV) of the shares on the day they vest. Does a Michigan law make it a felony to purposefully use the wrong gender pronouns? The cost basis for the sold RSUs is just the cost of aquisition ($0) + ordinary income recognized (which is the closing price of the stock (a.k.a. A special line on my pay stubs show how much income was the value of the rsu's when I vest. By clicking "Continue", you will leave the Community and be taken to that site instead. Hand off your taxes, get expert help, or do it yourself. by siamond Sat Feb 21, 2015 6:44 pm, Post I added the date acquired and cost basis in TT based on evancox10's initial, clear, explanation. Safe to drive back home with torn ball joint boot? So, when you enter your 1099-B, you may need to add the compensation income reported on your W-2 form to the basis reported on your form 1099-B. The form still says $0 on its "cost basis' column just like the 1099-B but with a "adjusted cost basis" column that the 1099-B lacks. The broker site may list this, or you can just look at the price history for the stock and find the closing price on that day. Cost Basis and RSU: THE Easy-to-Understand Tech Employee's Guide Connect and share knowledge within a single location that is structured and easy to search. Connect and share knowledge within a single location that is structured and easy to search. What are the pros and cons of allowing keywords to be abbreviated? We use the same "sell shares to withhold" method. Investors should consider their financial ability to continue their purchases through periods of low price levels. How to declare Cash Liquidation Distribution considering the Cost Basis? The remaining RSUs from your grant will usually be taxed differently depending on how long . Which is why you so often hear the term cost basis associated with RSUs. Supplemental Wages & Taxes: How Are Supplemental Wages Taxed? How does it differ from cost basis ? No guarantees are made as to the accuracy of the information on this site or the appropriateness of any advice to your particular situation. The thing is, these shares might vest immediately on the IPO date, or it may happen at a later date check your RSU Grant Agreement to figure out when this is. Or, if were talking about RSUs you didnt have to buy the market price that they were on the day they vested. In my case the brokerage statement seems to correctly report my cost basis as the FMV on the vesting dates. I cancelled my appointment to a tax accountant and filed my return myself. Why did Kirk decide to maroon Khan and his people instead of turning them over to Starfleet? Cookie Notice Let's take a look at this important investing concept. Why is RSU tax basis based on remaining shares after shares are witheld? By clicking "Continue", you will leave the Community and be taken to that site instead. by TN_Boy Sun Feb 22, 2015 9:30 am, Post For more information, please see our I've also got a Stock Plan Transactions Supplement form. We'll help you get started or pick up where you left off. Sorry, this post was deleted by the person who originally posted it. Found it! Does FIFO cost basis apply across multiple accounts? by siamond Sat Feb 21, 2015 5:31 pm, Post Thanks All. Is there a non-combative term for the word "enemy"? My company withheld taxes and reported the sale on my W2 in box 14. You should be able to download/obtain additional information from your employer, which states the vesting date and the amount included in your gross income (I.e., your cost of the shares). Generally, stocks purchased after January 1, 2011 are covered, as are exchange-traded funds (ETFs) and mutual funds purchased after January 1, 2012. I tried uploading all my tax forms by logging in ETrade via TurboTax premier. Geez, how can the IRS justify their new rules? Using the FIFO method, the tax lots that you bought earliest are sold first. You'll end up with the correct gain or loss for your sale and Form 8949 will be filled out properly, showing the "as reported" basis of $0 and your adjustment of that reported basis. by tfb Sun Mar 15, 2015 1:20 am, Post Browse other questions tagged, Start here for a quick overview of the site, Detailed answers to any questions you might have, Discuss the workings and policies of this site. To all those good people who tried to help, I found the answer. And any time those RSU shares vestmeaning the company hands ownership of them over to youyou become a wealthier individual. Remember that your compensation is based on the GROSS number of shares that you received, not on the net number of shares you received after some were sold or withheld for taxes. The order details dont have the cost basis as of now. Cookie Notice But one thing you should watch out for when filing your taxes is if your cost basis isnt reported, or if theres a missing cost basis anywhere. Ask questions and learn more about your taxes and finances. Sometimes people get confused about this, because there are so many moving parts to taxes, especially when youre talking about IPOs and shares and capital gains. By clicking Accept all cookies, you agree Stack Exchange can store cookies on your device and disclose information in accordance with our Cookie Policy. The 1099 will report gross proceeds of $20,000 and your cost basis in this example is the $100 x 100 shares of strike price you paid to acquire the options + the $100 x 100 of ordinary income you have already realized for taxes + the $10.99 ETRADE charges to sell the stock. The best answers are voted up and rise to the top, Not the answer you're looking for? Solved: RSU Adjusting Cost Basis - Intuit All rights reserved. ), ^ Click to reserve a free consultation. RSUs are taxed as normal income when they vest; The 1099-B will report a $0 cost basis; A supplemental info document should show the adjusted cost basis - but I don't have one of these / not sure if I will get one (via E-Trade) rev2023.7.3.43523. However, if I put my cost basis as $20,000, what happened to the unaccounted $5,000. This will protect you down the road as proof of your basis in your various investments. by siamond Sun Feb 22, 2015 7:08 am, Post At some point, it will allow you to edit each sale of you stocks, you need to click on edit, and follow instructions to enter information from 2nd and 3rd forms. to receive guidance from our tax experts and community. Assuming yes, I went ahead and entered my 1099B but the cost basis is zero. by evancox10 Sat Feb 21, 2015 6:26 pm, Post And a very good discussion above which is also relevant for me re: ESPP. Stack Exchange network consists of 182 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. In fact, the cost basis and RSU rules are incredibly straightforward: its the price the shares cost for normal market buyers the day they vested into your name. Applies to RSUs too. I have made my updates per your great guidance. That just seems like more work for the tax payer AND the IRS, since more transactions will be flagged for review due to not matching the reported 1099B information (assuming I'm reading this correctly). Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. I'm entering by each transaction to keep things straight: the date acquired/date sold, box1d for proceeds and then adjusted cost basis from supplement for box1e. Understanding restricted and performance stock - E*TRADE My company had a helpful note sent with ESPP information describing the change in reporting for 2014. My 1099-B says $0. Lastly, the MT-Minimum Tax Impact method sorts tax lots and prioritizes sales in a way that is intended to maximize losses and minimize gains. I have tried entering info several different ways but I never come up with the same number that eTrade displays for the gain/loss on the supplement form. Looking for advice repairing granite stair tiles. If not, where will I find the cost basis? Understanding what they are and your options for covering any associated taxes can help you make the most of the benefits they may provide. As we mentioned above, several factors can affect your cost basis calculation. But then of course as is with any form of income, the IRS wants their share too. But since most people will have multiple vest dates for their RSUs, that can be something that gets confusing when it comes time to file your taxes especially if youve had more than one set of shares vest to you under your RSU agreement. Yeah the share price has never really gone above ~$90, so it's doubled essentially. Are throat strikes much more dangerous than other acts of violence (that are legal in say MMA/UFC)? Hand off your taxes, get expert help, or do it yourself. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2s. Forms and Applications | E*TRADE or Morgan Stanley Private Bank Am I missing a piece of key information or am I using the Enter Vesting/Release page incorrectly? I'm entering by each transaction to keep things straight: the date acquired/date sold, box1d for proceeds and then adjusted cost basis from supplement for box1e. which you will need to supply to E*Trade. If theres nothing there, you may get an email once the IPO is announced to let you know when it will happen, so you can have a better idea of what the cost basis of these shares will be. Every investor should have a solid understanding of cost basis and how it's calculated. 1 I file my US taxes via TurboTax as a US lawful permanent resident. Move, Go to company page by Wannaretireearly Sat Mar 14, 2015 12:12 am, Post Additional places to look for purchase price information include past statements, transaction records, Schedules K-1 for master limited partnership investments and the Gains & Losses page. Looking for advice repairing granite stair tiles, Comic about an AI that equips its robot soldiers with spears and swords, Changing non-standard date timestamp format in CSV using awk/sed. Cost basis is the tax accounting method used to keep track of the value of shares you've already paid tax on in part one above, and it's used to calculate gain or loss on shares when you later sell them. So this would mean the adjusted cost basis would be $4000 with a capital loss of $2416? See the chart below for details on most commonly traded securities: Please note, master limited partnerships are not covered, and transferred securities are only covered if we receive a transfer statement from the broker. For a net short term capital loss of 10.99. I tried uploading all my tax forms by logging in ETrade via TurboTax premier. E*TRADE Copyright Policy, Cost basis: What it is, how it's calculated, and where to find it. From E*Trade I have: In 2017 I sold all of these, with proceeds of $7,814.83 and $10,709.51 respectively. Under the SLI method, you decide which tax lots are sold on a sale-by-sale basis. Please confirm if "Adjusted Cost basis" in ETrade would be the right value to enter for Cost basis for my ETrade RSUs. To me it make sense to put $25,000 as my cost basis because thats how much it cost to get my vested $20,000 RSU. by siamond Sun Mar 01, 2015 10:26 am, Post Follow TusboTax step by step. Browse other questions tagged, Start here for a quick overview of the site, Detailed answers to any questions you might have, Discuss the workings and policies of this site. 4 parallel LED's connected on a breadboard. There's two taxable events to take care of: It's not that Etrade does not want to provide the cost basis information. Wow, any speculation as to why they are forcing brokerages not to report what would be the correct basis 99.9% of the time? Apparently, I'm still getting confused, the numbers don't seem right to me. From my rough notes: Open a "borderless account" with TransferWise. by Wannaretireearly Sun Mar 15, 2015 7:59 pm, Post The key point here is that different methods may produce different results for the same salefor example, in certain circumstances, you might record a gain using the LIFO method but a loss using the FIFO method. You can download your tax forms, including your Form 1099-B, by logging on to your account and going to theTax Center. by siamond Sun Mar 15, 2015 11:40 pm, Post - This is the part that's stumping me, it seems too high? So, if you get 10,000 shares per year, but work for the company for three years before an IPO happens, thats 30,000 shares potentially vesting all at once. I want to urge you to create a financial notebook that is kept separate from your tax return. The cost basis is the income reported, although I'm not certain whether that's the cost basis for the 2/3rds I hold or all of them (I think the income reported is for all the shares, so divide to get the cost basis per share). All entities are separate but affiliated subsidiaries of Morgan Stanley. Program where I earned my Master's is changing its name in 2023-2024. The simplest way may be to NOT check it as an RSU sale and leave the cost basis as reported by the brokerage. It's a fairly complicated transaction because you've likely already paid some taxes through payroll when the shares were granted to you but you would need to calculate any gain/loss on the shares from the grant date to the sale date. So, if the price of the shares goes up, the difference between the cost basis and the current increased price will be considered a capital gain, and thats what youll be taxed on when you sell the shares. Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type. The form is only used when assets being claimed are valued under $10,000.00 and claimant is providing non-certified copies of legal documentation. Re: RSU Cost Basis (Etrade and Turbo Tax) - Help!! Your employer may or may not have reported it (either correctly or at all) to the broker for a correct basis on the form. What about the case for sales of RSUs that vested in prior years such as 2012 and 2013? I also am not sure how to find the FMV - would that just be the stock price at the time they vested (so I can check the document in E-Trade for when they vested and take the cost per share and treat that as the FMV)? and our With that in mind, here are several things you might consider as you prepare for tax seasonfrom year-end retirement planning to reviewing your portfolio and updating your investment goals. Or does Box 14 on the W2 really inflate the FMV. Why did CJ Roberts apply the Fourteenth Amendment to Harvard, a private school? But no, you should never need to adjust your cost basis for RSU shares. The Bogleheads Wiki: a collaborative work of the Bogleheads community, Local Chapters and Bogleheads Community. A restricted stock unit (RSU) is a form of stock-based compensation used to reward employees. E*TRADE uses features that may not be supported by your current browser and might not work as intended. Does this mean if I sold shares that vested in 2021, I'd have to get my 2021 W2, grab the value in Box 14, and divide that value by the number of shares that vested to get the FMV? Ask questions and learn more about your taxes and finances. Thanks Ill check next week. Here's is one link which I found. Real experts - to help or even do your taxes for you. Will my cost basis be $25,000 so that the $5,000 will be deducted from my total income. Using the "Stocks, Mutual Funds, Bonds, Other" interview enter the 1099-B exactly as it reads, including the "$0" cost basis shown on the 1099-B. How do I calculate the cost basis of Restricted Stock Units (RSUs)? The remaining $5,000, although I did not receive, was added to my total income and taxes deducted from it. My employer sold 400 shares of company stock @ $100 per share ($40,000 total) and paid to me as my years RSU indicated at block 14 of my W2 form. Adjusted Cost Basis from ETrade - Intuit By clicking "Continue", you will leave the Community and be taken to that site instead. The compensation should be disclosed to you on your W-2 and you know the gross number of shares in the grant so simple math will tell you the per share number used. Asked 2 years, 1 month ago Modified 4 months ago Viewed 4k times 2 Block 14 of my W2 says $40,000 RSU. Does a Michigan law make it a felony to purposefully use the wrong gender pronouns? ok, an update. What is the cost basis for my RSU? My 1099-B says $0 Yes, that's correct. And if youre registering a capital loss with these shares, they can be used to offset your capital gains in other investments. by Wannaretireearly Fri Mar 13, 2015 10:02 pm, Post I felt marvelous. Typically about 1/3rd of my vesting shares are sold and 2/3rds are held in the account. - Blind So I sold some stock today on etrade and what to get the exact cost basis. When youve got stock in a company, its normally a really, really good thing. RSUs vs. Cash: Which Should I Choose Before a Tech IPO? BTW, I rounded up all the numbers so as not to confuse. What do I enter for Cost Basis for ETrade RSUs ? but the cost basis for the shares you received (if taxes were withheld, which it sounds like they were) should be the price of those shares at the time you received them. by evancox10 Sun Mar 01, 2015 12:13 pm, Post This article explores what the Alternative Minimum Tax (AMT) is and what you may need to know about the tax and your exposure to it. Real experts - to help or even do your taxes for you. by siamond Sat Feb 21, 2015 9:53 pm, Post Site design / logo 2023 Stack Exchange Inc; user contributions licensed under CC BY-SA. I have RSUs that have vested and I also sold some in tax year 2021. When the RSU vested, the fair market value was added to your w2 and was your immediate basis in the stock. The basis should be the exact price they were previously taxed on (when it was added to their regular income on W-2). I work in the London office of a US company and I'm close to the vesting of the first part of my RSU grant they gave me when I joined. In that case, there are different methods to calculate the cost basis for the sale, each with its own set of rules. (In your scenario you'd have a capital loss, not a gain.). I'm planning to sell some of the shares (held in a US ETrade account) and to convert them to GBP but I'm not sure what is the most efficient way of doing so. But, you probably have a vesting schedule divided up over the course of four years, that means you get 10,000 shares per year. Splunk, Stock Plan>My Account tab>Gains & Losses. And most often, cost basis is the purchase price of an investment. and our By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. Ask questions and learn more about your taxes and finances. Read the article to learn more. The amount of the disallowed loss is added to the cost basis of the shares you bought and is used to calculate any future gain or loss. Is Linux swap still needed with Ubuntu 22.04. Use this form to verify a beneficiary for an E*TRADE or Morgan Stanley Private Bank account that is converting assets and/or cash due to a deceased owner. united states - Must I select "The cost basis is incorrect or missing 3 Answers Sorted by: 7 For RSUs, the cost basis should be the fair market value (FMV) of the shares on the day they vest. Post by Landon Loveall | Jun 13, 2019 | Building Wealth, Employee Stock Options, Financial Planning, Stock Options, Tax Planning, Tech Companies, Tech Industry. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. . FIFO is the default cost basis method used by E*TRADE from Morgan Stanley, unless you select a different method of calculation. But dont worry these are almost never as scary as they seem at first. TFB: Thank you very much! I'll start with the non-RSU case, then compare it to your situation. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. by tfb Sat Mar 14, 2015 12:45 am, Post 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). This is pretty simple, eTrade just isn't explaining it well. Why would the Bank not withdraw all of the money for the check amount I wrote? I have my 1099b and the supplemental from eTrade but I don't think I'm entering the information correctly in TurboTax. My colleagues seem to either use Transferwise or Revolut. If you a sell a percentage of your holdings in a fund and specify the average cost basis, can you later select another method when you sell again? 7 Female Founders Who Took Their Tech Companies Public, 7 Expert Tips to Protect Your Money in Stripes Tender Offer, Post-IPO blues: How to cut your losses after riding the tech stock dips. 1099's often don't record the original price, so it's up to you to look up the price you received them at. Stack Exchange network consists of 182 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. I don't get it. Your math doesn't add up (where is this $5,000 that you didn't receive?) I am trying to figure out how to report correctly. I am lost on this screen as to what is needed. RSU ETrade cost basis : r/etrade RSU ETrade cost basis Last year my company vested and I sold some RSUs. My paystub itemized the $15,000 tax deductions (fed, state, SSA, etc..). I found the "Stock Plan Transaction Supplement" that has a column that says "adjusted cost basis" of $19,900. by Tbone Sat Feb 21, 2015 3:46 pm, Post I have been doing my taxes since I started working and it pains me to think that I cant solve what seems to me a minor problem that I might need a tax professional to do what I have been doing for quite a while (Thats my pride talking) I might need their help this time around. Both E*Trade and Turbotax suck when it comes to RSUs. For more information, please see our In some cases, determining cost basis for a specific sale can be straightforward, but it gets more complicated when you sell a group of securities that were purchased on different dates, at varying prices. You will see an option when you enter an investment sale in TurboTax to adjust the cost basis, and this is all you need to do once you have entered your W-2 form to complete the entry of your employee . How do you manage your own comments on a foreign codebase? Thank you. The IRS puts this in the employee's hands to track their own basis. by indexfundfan Sat Feb 21, 2015 8:40 pm, Post Therefore, if I sold 10 shares for $500, the adjusted cost basis would be $545.4 and the gain would be -$45.4? Did the information on this page answer your question? I then assume these are all considered sales whether vesting or the actual sales so I mark the next screen as a Sale of RSU - stock acquired through a stock plan. Cost basis is the total amount that you pay to buy a security. Your per share basis should be exactly the same as the per share "fair market value" used by your employer to calculate the compensation created by the vesting of the RSUs: Compensation = (GROSS number of shares in grant) x (per share fair market value used by employer). For the best user experience,please use an updated browser. Reddit, Inc. 2023. This number should agree with any statement your employer sends you as mentioned above (mine called it "Total W-2 income" for the given lot). We'll help you get started or pick up where you left off. by Wannaretireearly Sat Feb 21, 2015 3:34 pm, Post Put simply, your "income" for the RSUs was $40,000 - taxes were withheld from this $40,000, so the only tax you owe is the gain on the shares you received after taxes. Discuss, learn and request help on how to obtain, budget, protect, save and invest your money in the UK.
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