My company offers RSUs — restricted stock units — as a benefit. These vest after a certain amount of time, and in 2013, my first chunk vested with a value of about $6400. As I understand it, at that time, when I accepted the distribution, that was reported as income, and Fidelity even sold some fraction to cover withholding, leaving about $4000.
Slightly more than a year later, I sold the entire lot; the stock price had gone up, so the total amount was $5200.
I'm new to all of this, but my understanding was that this would be a long term capital gain of about $1200.
However, my 1099-B from Fidelity has:
1b date acquired : 10/16/13
1c date sold : 10/28/14
1d proceeds : $5200
1e cost or other basis : $0
1f code / 1g adjustments : -
Gain/loss : $200
4 Federal Inc Tax Withheld : $0
Box D Long-term realized gain: $5200
There is, however, a "2014 Supplemental information" form, which notes "This information is not reported to the IRS. It may assist you in tax return preparation". On this form, there is "Ordinary Income Reported" of $4000, "Adjusted Cost or Other Basis" is also $4000, and the final column is Adjusted Gain/Loss: $1200, just as I expected.
I'm confused. Why does the 1099-B say "0"? Is that $4000 actually taxed both as regular income and then again as capital gains? (That doesn't seem right, and I found Tax implications of restricted stock units on this site, which seems to agree with my expectations. On the other hand, I don't want to put down what I think is right and have Fidelity tell the IRS that I owe a lot more.
What is the right thing to do on my tax return?
