How to correctly report 1099B with Employee stock

Heatherrjoy
Heatherrjoy Member Posts: 1 Newcomer
in Filing my taxes

I received a W2, 1099B and statement of taxable income. The information on the statement of taxable income says this was received as a result of Restricted Stock options but also says its possible to receive for Incentive Stock Options. I am trying to figure out which option it is. The amount of stock reported as income in the W2 is $2,388 as presented on the statement of taxable income. Boxes 1, 3, 5, and 16 all show the increased amount on the W2 but it is not reported anywhere else (nothing in box 14). The 1099B shows Date acquired 12/05/25 date sold 12/08/25 and Proceeds (1d) $2,330 and Cost or Other Basis (1e) $2,388 which shows a loss of ($58).

The Cost Basis and W2 amount from the statement are the same. When entering the 1099B information it asks if I need to adjust the cost basis. Do I adjust the Cost Basis at all? If I do, what calculation am I using to adjust it?

Thank you.

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Answers

  • JanaA
    JanaA FreeTaxUSA Agent Posts: 116 image
    Hello Heartherrjoy! Based on the information you've provided, this appears to be Restricted Stock Units (RSUs) rather than Incentive Stock Options (ISOs). The $2,388 was included in boxes 1, 3, 5, and 16 of your W-2, which is typical for RSUs that vest and are immediately sold. With ISOs, you generally wouldn't see income reported on your W-2 unless there was a disqualifying disposition.

    You do not need to adjust the cost basis. Your 1099-B already shows the correct cost basis of $2,388, which matches the amount reported as income on your W-2. This is exactly what should happen with RSUs.

    When you enter your 1099-B into FreeTaxUSA:
    1. Enter the proceeds of $2,330 in the 'Proceeds' box
    2. Enter the cost basis of $2,388 in the 'Basis' box (as shown on your 1099-B)
    3. When asked if you need to adjust the cost basis, select No

    Since your broker has already provided the correct adjusted basis on the 1099-B ($2,388), you'll simply report a short-term capital loss of $58. You won't be double-taxed because the basis already accounts for the amount you were taxed on via your W-2.

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