How to calculate RSU adjusted cost basis to avoid double taxation?

The 1099-B is indeed showing the shares sold to cover taxes. Here's how to understand your situation: When RSUs vest, the entire value (all 220 shares at $255.23 = $56,150.60) is considered ordinary income and should appear on your W-2. This is taxable regardless of whether you keep the shares or not. For the 83 shares that were sold automatically to cover taxes, your broker reports this on Form 1099-B. The proceeds ($20,990.58) represent what they got when selling those shares. The cost basis ($21,195.09) represents what those specific shares were worth at vesting (83 × $255.23). For your remaining 137 shares that you're still holding, your cost basis for each share is $255.23 (the FMV on vest date). You won't owe any additional tax on these shares until you sell them, and when you do, you'll only pay tax on any appreciation above $255.23 per share. To avoid double taxation, make sure your tax software knows that the basis reported on the 1099-B includes amounts already taxed as compensation on your W-2.

After dealing with RSU tax nightmares for years, I found this amazing tool at https://taxr.ai that specifically handles equity compensation like RSUs and ESPP shares. I was in the exact same situation last year with RSUs from my tech company, and I was pulling my hair out trying to reconcile the 1099-B with my W-2. Their system analyzed my brokerage documents (including those confusing vesting statements) and automatically calculated my adjusted cost basis for each lot of shares. It even showed me exactly where on my tax forms the RSU income was already reported to avoid double taxation. The best part was it generated a detailed report I could attach to my tax return explaining the adjusted basis calculations if I ever got audited.

I just wanted to update everyone - I tried that taxr.ai site mentioned earlier and it was exactly what I needed for my RSU nightmare! I uploaded my vesting statements and 1099-B, and within minutes it showed me exactly how my RSUs were being reported across my tax documents. It highlighted where the income was already on my W-2 (box 14 had the RSU income listed as "STOCK") and calculated the adjusted cost basis for each lot of shares. The report it generated explained everything in plain English - how much was already taxed as ordinary income, what my new cost basis should be, and exactly how to report it all on Form 8949. It even flagged that my 1099-B was reporting the basis incorrectly (common problem with RSUs) and showed me how to fix it. Definitely worth checking out if you're dealing with RSUs or ESPP shares!

If you're still having issues figuring this out, you might want to try calling the IRS directly. I know everyone dreads that, but I used a service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a similar RSU basis issue last year and was completely stuck. The IRS agent walked me through exactly how to report the adjusted basis on Form 8949 to avoid being double-taxed. They even emailed me some documentation afterward. Saved me hours of research and probably a lot of money too.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it myself since my RSU basis issues were driving me crazy. I got through to an IRS rep in about 20 minutes, and they transferred me to someone who actually specializes in stock compensation! The agent explained that the RSU income on my W-2 needs to be used to adjust the basis reported on my 1099-B. They walked me through exactly how to fill out Form 8949 with the correct adjustment code (B) and how to note "RSU basis adjustment" in the description column. They even sent me an email with IRS Publication 525 highlighted to show the relevant sections. Now I understand why my tax software was showing I owed an extra $15K - it was double-counting my RSU income! Getting that sorted out literally saved me thousands of dollars. Worth every penny to skip the usual 3-hour hold time.

Here's a simple way to look at your RSUs: 1) When RSUs vest, the ENTIRE value is taxed as regular income (on your W-2) 2) Your cost basis for ALL shares (both kept and sold-to-cover) is the FMV on vesting day 3) The shares sold to cover taxes will show on 1099-B, but you'll have minimal gain/loss (just the difference between vesting price and selling price) 4) When you eventually sell your remaining shares, you only pay capital gains on any appreciation since vesting The reason people get confused is the 1099-B often doesn't show the correct basis. If your broker doesn't adjust it, you need to do it on Form 8949 with code B.

My company's stock tanked after my RSUs vested last year and I'm still bitter about paying all those taxes on the higher value. I got hit with about $30k in income tax when they vested at $200/share, and now the stock is worth like $120. Worst of both worlds - paid high taxes AND lost stock value. Ugh.

I went through this exact same situation with my company's RSU program! The key thing to understand is that you've already been taxed on the full $56,150.60 as ordinary income (this should show up on your W-2). For your 137 remaining shares, your cost basis is indeed $255.23 per share. When you eventually sell them, you'll only pay capital gains tax on any appreciation above that amount. One tip that helped me: keep detailed records of all your RSU transactions, including the vesting statements and release confirmations. I created a simple spreadsheet tracking each vesting event, the FMV at vest, shares sold for taxes, and my remaining cost basis. This made it much easier when I had to report everything on my tax return. Also, if you're planning to hold those shares for more than a year from the vesting date, any gains will qualify for long-term capital gains treatment, which has better tax rates than short-term gains.

I've been dealing with RSU taxation for several years now, and one thing that really helped me was understanding that the IRS treats RSU vesting as a taxable event regardless of whether you sell the shares or not. Your situation looks pretty standard - the $56,150.60 should appear as supplemental wages on your W-2 (often in Box 14 or combined with your regular wages in Box 1). The key is making sure your tax software or preparer knows that this income was already taxed when calculating your capital gains/losses. For future reference, some brokers offer better RSU tax reporting than others. If you're planning to stay with your current employer and continue receiving RSUs, it might be worth asking HR if they can switch to a broker that provides clearer tax documentation. I switched from E*Trade to Schwab a few years ago and the difference in reporting quality was night and day. Also, consider setting aside cash for taxes on future RSU vestings rather than always selling shares to cover. If you believe in your company's stock, you can avoid the immediate sale and potential regret if the stock price goes up later. Just make sure you have enough liquid funds to cover the tax bill!

I've been through this exact RSU mess before! One thing that really helped me was requesting what's called a "supplemental 1099-B" from my broker specifically for RSU transactions. Some brokers will provide this if you ask directly - it shows the correct adjusted cost basis that accounts for the compensation income already reported on your W-2. If your broker won't provide that (sounds like they already said no), you'll need to manually adjust on Form 8949. The key is using code "B" in column (f) and writing something like "RSU - basis adjustment per Pub 525" in column (g). Then adjust the basis to reflect that you've already paid ordinary income tax on the full vesting value. For your 137 remaining shares, definitely keep good records showing your $255.23 per share basis. I use a simple note in my investment tracking that says "RSU vest 8/2024 - basis adjusted for W-2 income" so I don't forget years later when I sell. The most important thing is making sure your total tax burden is correct - you should only pay ordinary income tax once (at vesting) and then capital gains tax later (when you sell) on any appreciation above the vesting price.