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I'm facing a dilemma with the IRS on account of some RSUs that vested back in 2022. Apparently my broker didn't communicate the cost basis to the IRS and with a fraction of the shares being sold to cover the ordinary income tax the IRS sees those sold shares in a 1099-B as having a cost basis of 0 and that the sold shares are to be counted as taxable income.

Did some law change between 2019 and 2022 that altered the way RSU income is reported to the IRS? I received RSUs from another company back in 2018 and 2019 and the broker at the time (eTrade) issued a 1099+ Consolidated 2019 Forms and details. That document enumerated in its table of contents the following...

TABLE OF CONTENTS

Consolidated 1099 Sections:

1099-DIV / INT Summary Information

Details:

1099-DIV Dividend & Distribution Details

Your Account did not receive the following Forms:

  • 1099-INT
  • 1099-B <------------- not generated at the time
  • 1099-OID
  • 1099-MISC

So I'm curious why one employer did not produce a 1099-B several years ago while my new employer did produce a 1099-B. Is it the case that every RSU vesting event with any number of shares that get sold must now generate a 1099-B by the brokerage?

jxramos
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1 Answers1

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Is it the case that every RSU vesting event with any number of shares that get sold must now generate a 1099-B by the brokerage

Yes.

I don't know why one employer in 2018 didn't produce that for you, seems weird. It may be that they did, but it is separate from your own individual brokerage account (which is what the consolidated statement is for). You might need to switch accounts in the UI to find it. I know ETrade specifically used to issue separate 1099 forms for each different account, so if you have a personal brokerage with them and the RSU account - they would have issued separate 1099 forms for each.

As to why the basis reported to the IRS is $0 - see this answer.

littleadv
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