How to Report Sale of RSU Shares on Your Tax Return

Restricted stock units (RSU) is one type of employee compensation offered by many corporations. You are granted company shares by your employer and receive shares of stock granted to you based on the vesting schedule. When the RSU becomes vested, the vesting shares are delivered to you and the fair market value of shares on the vesting date is treated as compensation and reported as wages on your W-2 form. When you sell the RSU shares, you should use the fair market value of shares on the vesting date as cost basis to figure out gain or loss from the sell since these shares were taxed as wages when they were vested. Here is an example of how to report sale of RSU shares on your tax return.

Example: April was granted 500 shares RSU by her employer. 100 shares of the RSU were vested this year. The share price on vesting date is $100.  Her employer withheld 30 shares to cover her federal and state taxes and delivered the remaining 70 shares to her brokerage account.  She sold the 70 shares when the stock is $105 per share.

Step 1: Collect information for reporting.

1. Form 1099-B. This form reports proceeds from stock sale and should be sent to you by your brokerage firm by 1/31 following the year of stock sell.

2. Any document from your employer or brokerage firm that provides information for the vesting and sale of your RSU.

Step 2: Calculate gain/loss from the sale.

Use information you collected from Step 1 to figure out:

1. Number of shares sold that are reported on Form 1099-B.
2. Fair market value per share  on selling date.
3. Fair market value per share  on vesting date.

Calculate proceeds, cost basis  and gain or loss from the sale as following:

Step 3: Report the capital gain/loss on Form 8949 or Schedule D.

Report the gain/loss on Part I of Form 8949 if you hold the stock less than one year, or Part II of Form 8949 if you hold the stock more than one year. Your holding period is from vesting date ( which is also your purchase date) to the date of stock sale.


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