TurboTax couldn’t do a good job if RSU…

1099-B: RSU with same lot-when 2 forms are received TurboTax not calculating correctly

Updated: 3/22/2010

Article ID: 7953

We are aware that there are limitations to our support of this specific situation in TurboTax. We will address this for the 2010 TurboTax product. In the meantime, if you are experiencing this situation, you can use the steps below to workaround the limitation.

Workaround Suggestion #1

Most users will find this method the easiest to understand and follow:

1. Open your tax return and select the Federal Taxes tab.
2. Select the Wages and Income sub-category.
3. Scroll down to Investment Income and select to Update the Stocks, Employer Stocks, Other category.
4. Choose to follow the Step-By-Step Guidance method of the Interview.
5. Walk through the Interview questions and check your entries for the Employee Stock Purchase Plan entries. When you have completed your entries you will see a screen called Your Employee Stock Plan Results.
6. On this screen, enter the same amount in the field Actual Amount on W-2 as in the column Amount We Computed. This will eliminate the additional wages income that would show up on Line 7, of the Form 1040.

Another way to approach this is to enter the RSUs as a normal stock sale. In most cases, the withholding takes place when the shares vest and enough stock is sold to cover the taxes. If you are knowledgeable about how to report this, then you can utilize this other workaround idea.

• The first 1099-B entry should show proceeds equaling cost (or cost plus transaction fees) for a net gain of zero (or a slight loss).
• Since the owner of the RSUs now owns the remaining stock, he can treat the second lot (or 1099-B) like any other stock sale: Proceeds minus cost equals gain/loss. The cost should be the share price on the date the RSUs vested (or the price at which the original lot was sold to cover the taxes.)
• The proceeds will be the share price on the date sold, times the number of shares sold.
  
  
  for details, please refer to
  

  http://turbotax.intuit.com/support/kb/personal-income/investment-income/7953.html