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EquityDue

See the tax bill hiding in your RSUs before it lands.

The double-counted cost basis mistake on 1099-B

Compensation income and capital gain are different boxes. Mixing them without basis adjustments creates phantom tax.

Two events

Vest day: ordinary income hits the W-2 at FMV. Sale day: 1099-B reports proceeds. Your capital gain should generally start from basis that already reflects income recognized at vest (details depend on lot and withholding method).

Why brokers still mess this up

Some lots show unadjusted basis. Equity awards across multiple vests create many lots. Export the broker’s cost-basis detail; do not trust the summary PDF alone.

Filing checklist

  • List each vest FMV already on the W-2.
  • Match sale lots to vest lots.
  • Adjust basis on Form 8949 when the 1099-B is incomplete.
  • Keep grant/vest confirmations with the return package.

General information, not personalized advice.

Common questions

What goes on the W-2?
The fair market value of vested RSUs (net of any share withholding structures) is generally ordinary compensation income.
What goes on the 1099-B?
When you sell shares, the broker reports proceeds. Basis may be unadjusted or incomplete depending on the broker and lot.
How does double counting happen?
If you report sale gains without increasing basis for compensation already taxed on the W-2, income can look doubled.
Who fixes it?
You (or your preparer) reconcile lots — often via Form 8949 adjustments. EquityDue does not file for you.
Advice?
Educational checklist only.
The Double-Counted Cost Basis Mistake on 1099-B by EquityDue ↗