1099-B Entering Correct Cost Basis for RSU and ESPP (QSP) Sales

tb001
tb001 Member Posts: 9 Newcomer
edited April 11 in Filing my taxes

Hi, I need help confirming whether I entered the correct cost basis for RSU and ESPP sales reported on my Fidelity 1099-B.

Situation:

On my 1099-B from Fidelity, I had two types of stock sales:

Section 1: Long-term transactions reported to IRS (Box D checked)

Two equities were sold:

  • Equity X: Cost basis in 1099-B matched the Fidelity supplemental info.
  • Equity Y: Cost basis in 1099-B did not match the supplemental info. This was an ESPP sale (QSP).

On the screen “Tell us about your Fidelity taxable stock sales”:

  • I entered the Box 1e cost basis as shown in 1099-B (Which doesn't matches adjusted cost basis in supplemental info)
  • Then marked “The basis shown in Box 1e is incorrect.”
  • On the next screen, I used the “Adjusted Cost or Other Basis” from the Fidelity supplemental sheet to correct the cost basis for both equities.

Section 2: Long-term transaction not reported to IRS (Box E checked)

One equity sold (Equity Y again, from RSU grant):

  • Cost basis in 1099-B was $0, which does not match the supplemental info.
  • I followed the same steps as above and entered the correct cost basis from the “Adjusted Cost or Other Basis” column in the Fidelity supplemental sheet.

My Question:

Did I do this correctly by using the “Adjusted Cost or Other Basis” column from Fidelity’s supplemental sheet as the true cost basis for both my RSU and ESPP (QSP) sales?

Thanks in advance!

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Answers

  • GeorgeM
    GeorgeM FreeTaxUSA Agent Posts: 11

    Hello tb001:

    Yes, by using the Fidelity Supplement to your Form 1099-B it appears you entered the correct cost basis for the sale of your ESPP shares, and the sale of your RSUs.  

    Generally, a supplement to Form 1099-B will include the most up-to-date pricing information regarding cost basis for shares sold when such information was not readily available at the time the original Form 1099-B was prepared.   

    You began your post mentioning that the long-term transactions were reported to the IRS with Box D checked; however, later in your post you mention that you entered the cost basis information with Box E checked which you thereafter modified to reflect the accurate cost basis based on the Fidelity Supplement.  You might want to double check whether the cost basis for the transactions at issue were in fact reported to the IRS (Box D checked), or were not so reported to the IRS (Box E checked). 

    You did not mention in your post whether you had any questions about reporting any compensation income in connection with the sale of your ESPP shares.  When you sold your ESPP shares, and assuming you were still employed by the same employer whose shares you purchased, usually the employer will include the amount of any compensation income as wages in Box 1 of your W-2. 

    If you have questions about the reporting of your compensation income, you can discuss it with your employer, or you could follow-up with us too.  However, your employer should know how and what amount was reported as compensation income on your W-2 when you sold your ESPP shares.

    Regarding the sale of your RSUs, it is not uncommon to find RSUs initially reported with a 0 cost basis.  It was good for you that you received the Fidelity Supplement with the correct cost basis for your RSUs.  

    Below you will find links to FreeTaxUSA articles that discuss RSUs and ESPPs which you might find very helpful.  

    https://community.freetaxusa.com/kb/articles/142-what-are-restricted-stock-units-rsu?utm_source=community-search&utm_medium=organic-search&utm_term=rsu

    https://community.freetaxusa.com/kb/articles/151-what-is-an-employee-stock-purchase-plan-espp-and-how-is-the-income-reported-and-taxed?utm_source=community-search&utm_medium=organic-search&utm_term=espp

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