Comments on: RSU Sell To Cover Deconstructed

By: TFB

TFB — Sat, 17 Apr 2010 13:58:37 +0000

Rose – It is correct you only report on Schedule D when you sell the shares. You will have to print out the returns from the two software programs you are using and see where the difference comes from. Make sure you didn’t over-state your tax withholding. I’m guessing you gave the wrong answer to a question “was there tax withholding for this sale” in TurboTax.

By: Rose

Rose — Fri, 16 Apr 2010 22:26:24 +0000

Thanks for writing back. You are the hero of the hour! Just to clarify… I only report any RS that was sold (even if just to cover tax) and the other vested RS doesn’t need to be reported until it is sold officially, even though it was already taxed and reported on my W2? This seems a situation of something that is so simple, it is confusing. (Tax Act seems to just take it as it is, but Turbo Tax has increased our refund by $1000, which seems directly related to the RS amount that was not sold but still reported. ???)

By: TFB

TFB — Fri, 16 Apr 2010 21:06:12 +0000

Rose – Sorry I can’t provide free tech support for TurboTax. I said several times in the comments already — stay away from the confusing help provided by TurboTax. Go straight to spreadsheet-style entries.

By: Rose

Rose — Fri, 16 Apr 2010 19:04:26 +0000

Thanks for continuing to post and help. When I use Turbo Tax Premiere to report restricted stock, in the end I have an error that my RS doesn’t match my W2 reporting. This seems to be because my W2 reports both “sell to cover” restricted stock and RS where the taxes were paid with cash, so there was no sale. From what I read in your posts, if there is no sale it is reported in your W2 and need not be reported elsewhere until it is sold. The error message is this: Employer Stock Compensation Income Wks: Part III Column (f)-1 ($10,000) should not exceed the total amount of 6,000. If I only sold $6000, but $10,000 of tax was reported, what I am I doing wrong?

By: TFB

TFB — Mon, 12 Apr 2010 04:52:22 +0000

Naveen – See comments #20 & #21. Check your paystubs both before and after the vesting date.

By: Naveen

Naveen — Mon, 12 Apr 2010 04:33:13 +0000

Hi,

I had some of my RSUs vest last year. At the time of vesting, I paid the necessary taxes using money in my brokerage account (mistake, I am regretting now . I was checking my W2 and I do not see the taxes that were taken out of my account included anywhere. Total value of the vested RSU’s, approximately $3000, are included as ordinary income in my W2. I checked all my paychecks since the vesting date and I do not see the extra taxes included in any of them.

How do I include the taxes taken out of my account in my tax filing ?

By: TFB

TFB — Mon, 12 Apr 2010 02:43:21 +0000

ean – See comments #9 and #10 and especially the link in #10 about wash sale. Wash sale covers the day of sale and 30 days before and 30 days after. Did you buy ESPP shares in that timeframe? Salary deductions don’t count as share purchase. Only the actual purchase at the end of the six-month ESPP purchase period counts as purchase.

If the sale does fall within 30 days of purchase, I would be conservative and count it as wash sale. You don’t lose your loss in a wash sale. You just postpone it to the ESPP shares.

By: ean

ean — Sun, 11 Apr 2010 06:25:01 +0000

I’ve read (and re-re-read) all this great info but I still can’t decide if my quarterly vesting RSUs are a WASH sale due to 6 month ESPP purchases. I always get a small loss on each sell-to-cover (due to etrade $19.95 commission) and I’ve been reporting the losses the last few tax years. I also buy ESPP every 6 months so I guess that half of my RSU vests should be a WASH. (ARGH why does this have to be so tricky!)

By: TFB

TFB — Sat, 10 Apr 2010 23:34:50 +0000

Kevin – I can see arguments either way. I don’t know the answer to your question.

By: Kevin

Kevin — Fri, 09 Apr 2010 22:04:05 +0000

Hi! Can you help me with this example.

Lot 1. 100 shares vested on 1/10/2009. I paid cash to cover the tax of these shares so 100 shares are in my brokerage account.

Lot 2. 100 shares vested on 6/10/2009. 40 shares were sold to cover taxes and 60 were added to my brokerage account for a total of 160 shares in my account.

Assuming I use FIFO for reporting all my other stocks not from my employer… To report the sale on 6/10 which lot do I report these 40 shares are from. (ie. were these 40 shares acquired on 1/10 or 6/10)?