Need help calculating RSU adjusted cost basis to avoid double taxation

Hey tax folks, I got some RSU stock that vested in July this year, plus some ESPP shares that came through in May for the January-May period. For context, I received the first half of my RSU grant back in July 2023. I'm struggling with figuring out the adjusted cost basis for these RSUs. The grant was for 275 shares total, with 104 shares automatically sold to cover taxes, leaving me with 171 shares that hit my account in July 2024. Looking at the release confirmation document from my company's stock portal, I see: - Original grant price (2021): $142.22 - Release price: $238.91 - Sale price: $236.75 - FMV at vest: $238.91 - Weighted average sale price: $236.75 - Total value at vest (FMV × total shares): $65,700.25 - Award price: $0.00 - Tax withholding total: $19,649.47 The tax withholding amount ($19,649.47) appears on my 1099-B as the "Proceeds" while $19,840.11 is listed as "Cost or other basis." I'm trying to make sure I understand this correctly to avoid double taxation on these RSUs. It looks like my 1099-B is only showing the portion that was sold to cover taxes (104 shares) when the full 275 shares vested. I contacted my brokerage asking for a supplemental document showing the adjusted cost basis details, but they just sent me back the same 1099-B form and said they don't have anything else. To be clear, I haven't sold any of the 171 RSU shares I received - still holding onto those. Anyone who can help me understand how to properly calculate the adjusted cost basis would be a lifesaver! Thanks in advance.

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18 comments

Tyrone Hill

•8M

The good news is you're on the right track by focusing on cost basis! For RSUs, understanding the tax treatment helps avoid double taxation. What's happening is that when RSUs vest, the full market value at vesting ($238.91 × 275 shares = $65,700.25) is considered ordinary income and already included in your W-2. That's why they sold 104 shares to cover taxes - they were withholding approximately 30% for federal, state, and other taxes. For the shares sold at vesting to cover taxes (104 shares), your 1099-B should show proceeds of $19,649.47 (sale amount) and a cost basis close to that same amount (the $19,840.11 you mentioned). The small difference represents the slight market movement between when the shares vested and when they were actually sold. This small loss can be reported on your tax return. For the 171 remaining shares you're still holding, your adjusted cost basis is the FMV on the vesting date - so $238.91 per share. When you eventually sell these shares, you'll only pay capital gains tax on any appreciation above $238.91 per share.

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Tyrone Hill

•8M

Exactly! When you sell those 171 shares, you'll subtract $238.91 from whatever the sale price is per share to determine your capital gain or loss. If you hold them for more than a year after the vesting date, any gain would be long-term capital gains (typically taxed at a lower rate). If less than a year, it would be short-term capital gains (taxed at your ordinary income rate). You're absolutely right that this prevents double taxation. The original value at vesting ($238.91 per share) was already included in your W-2 as ordinary income, so your cost basis is set at that amount. You'll only be taxed on any appreciation that occurs after vesting.

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Lena Kowalski

•8M

I went through this exact same headache last year with my RSUs! After hours of research and frustration, I found this amazing tool called taxr.ai (https://taxr.ai) that basically saved my sanity. It has a specific feature for RSU and stock option tax calculations that makes this whole process WAY easier. What's cool is that you can upload your 1099-B and company vesting statements, and it automatically calculates your adjusted cost basis and shows exactly how to report everything correctly. It even explains the difference between the W-2 reported income and what appears on your 1099-B to prevent double taxation. I was about to pay my accountant an extra $250 to figure this out before I found this. The site also has a specific guide for RSU tax reporting that explains everything in plain English - something my company's stock administrator definitely failed at!

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Lena Kowalski

•8M

It absolutely works with multiple vesting dates! You can input each vest separately or upload multiple statements, and it tracks everything with the correct dates and cost basis for each lot. The tool is specifically designed to handle complicated scenarios with multiple vests and different grant dates. For integrating with tax software, it produces a report you can use when entering information into TurboTax or other tax software. It shows exactly which numbers go where. I actually found it handles complex situations better than most accountants because it's specifically built for equity compensation. It definitely handles ISOs too - it has separate calculators for RSUs, ISOs, NSOs, ESPPs, and even helps with AMT calculations if your ISOs trigger that.

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Mei-Ling Chen

•8M

I was really skeptical about using online tools for my RSU tax situation, but after my accountant made a $3,200 mistake on my return last year, I decided to try taxr.ai that someone mentioned here. Holy crap, it actually saved me from making a huge error this year! I had a similar situation with shares sold to cover taxes, and the tool immediately flagged that I was about to double-count income that was already on my W-2. It walked me through adjusting my cost basis for each lot of RSUs based on vesting date FMV. The visualization showing how the shares flow from grant to vest to sale made the whole concept click for me. It even generated a supplemental statement I could attach to my return explaining the adjusted basis calculations in case of an audit. Definitely recommend for anyone dealing with equity compensation - it's way more specialized than what most CPAs seem to know about RSUs.

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Sofía Rodríguez

•8M

Hey all - I just wanted to share something that might help. After dealing with this exact RSU tax nightmare and getting NOWHERE with my broker's customer service, I found a service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent who walked me through how to properly report my cost basis. The regular IRS number had me on hold for 3+ hours before disconnecting twice! With Claimyr (there's a demo video here: https://youtu.be/_kiP6q8DX5c), I got a callback from the IRS in about 20 minutes. The agent confirmed that my broker should have included the adjusted basis info and explained exactly how to fill out Form 8949 with the correct adjustment. For anyone struggling with understanding their 1099-B for RSUs, getting official guidance directly from the IRS was super helpful and gave me confidence I wasn't making a costly mistake.

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Sofía Rodríguez

•8M

They have a system that constantly redials the IRS for you using their commercial phone system, so you don't have to stay on hold. When they reach an IRS agent, they call you back and connect you directly. It basically jumps you ahead in the queue because their system is persistent with the redialing. I was skeptical too! The actual call with the IRS agent was about 15 minutes. You're right that not every agent knows about RSUs specifically, but I got transferred to someone in their investment income department who absolutely did understand the correct tax treatment. They deal with these questions all day long. The agent even emailed me the specific IRS publication sections that covered my situation.

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Zoe Papadopoulos

•8M

I've got to admit I was completely wrong about Claimyr. After my skeptical comment, I was still desperate for answers about my RSU basis issues before the filing deadline, so I decided to try it anyway. The service actually worked exactly as described. I got a call back with an IRS agent on the line in about 30 minutes. I was connected to someone in their investment income specialist group who not only explained how to correctly report my RSUs but also sent me follow-up documentation. The agent confirmed that I needed to make a basis adjustment on Form 8949 with code "B" to prevent double taxation on the RSU income already reported on my W-2. This was exactly what I needed and completely different from what my tax software was suggesting. I'm honestly shocked at how well this worked - saved me hours of frustration and potentially a lot of money in incorrect tax payments.

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Jamal Brown

•8M

Don't forget that if you're still holding the remaining 171 shares, you'll want to keep extremely detailed records of your cost basis for when you eventually sell! I learned this the hard way. My company did 3 acquisitions over 5 years, which meant our stock went through multiple conversions. When I finally sold shares last year, I had absolutely zero documentation from the original grants 8 years ago. Ended up having to piece everything together from old paystubs and emails. I'd recommend creating a spreadsheet right now with: - Grant date - Vest date - FMV on vest date - Number of shares - Any adjustments for stock splits/mergers Trust me, future you will be eternally grateful when you need this info 5+ years from now!

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Jamal Brown

•8M

I don't have a specific template, but I created one in Google Sheets that works well. The key columns I use are: Grant Type (RSU/ISO/ESPP), Grant Date, Vest Date, Shares Granted, Shares Vested, FMV at Grant, FMV at Vest, Shares Sold for Taxes, Net Shares Received, and Cost Basis per Share. I also add notes for any corporate actions like splits or mergers that affected share counts. This has saved me countless hours at tax time. The most important thing is to update it immediately when new shares vest, because trying to reconstruct this later is a nightmare.

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