Your 1099-B shows large proceeds from selling RSU shares and tax software wants to tax the full amount — or you received an IRS notice matching proceeds without basis. You need to separate sale proceeds from taxable capital gain after vest FMV basis.
In plain terms
Gather before you start
- for sale with proceeds and basis boxes.
- confirmation for sold lot.
- from year showing wages.
- Tax software import preview before filing.
- calculator or 8949 worksheet.
Broker proceeds reporting is gross sale price. Correct basis comes from vest records, not 1099-B alone.
How the tax works
Brokers report gross proceeds to IRS on Box 1d — IRS matching programs compare proceeds to return.
Proceeds include return of your basis ( ) plus any price change after .
Zero basis on makes software think gain equals proceeds — common reporting error.
already taxed as wages — basis adjustment on Form 8949 removes that portion from .
CP2000 notices sometimes propose tax on full proceeds when basis missing from return.
Short-term gain is proceeds minus basis when held one year or less from .
Long-term gain uses same basis math with lower rates on eligible gain.
More detail (8 additional points)
Multiple lots need proceeds and basis per lot — not one blended rate.
at may produce small proceeds with basis near — gain near zero.
Wash sale rules rarely apply to typical lot sales — separate analysis for repurchases.
Proceeds in tax software flow to Form 8949 then Schedule D — basis column is critical.
Broker supplemental statements may show employer failed to transmit.
Gift or transfer of shares after changes basis tracking — original employee uses .
State tax follows federal gain amount after correct basis — not raw proceeds.
Amended returns fix proceeds-overtaxed when basis omitted on original 8949.
What to check on your end
- proceeds vs shares sold times sale price.
- Basis equals times shares from confirmation.
- Gain equals proceeds minus basis on Form 8949.
- year includes that in wages.
- Software did not import zero basis uncorrected.
- Adjustment code and column per Form 8949 instructions.
- Schedule D gain matches sum of 8949 lines.
1 more checklist item
- No duplicate wage reporting of same on sale line.
Paying tax on 1099-B proceeds instead of proceeds minus basis
What to pull from your files
- proceeds and basis boxes.
- confirmation for sold lot.
- Form 8949 with basis adjustment.
- Schedule D total gain.
- Box 1 for year.
$10,000 proceeds, $9,500 basis
Illustration only, not your tax situation.
Questions people ask
- Are 1099-B proceeds taxable income for RSUs?
- Not in full — taxable gain is proceeds minus basis. Basis is generally already on .
- Why does 1099-B show huge proceeds on RSU sale?
- Proceeds are gross sale price. Most of that may be return of basis, not gain, when basis is entered correctly.
- 1099-B proceeds vs W-2 RSU wages?
- reports wages. reports sale. Basis links them — same should not tax twice.
- IRS notice on full 1099-B proceeds?
- Often missing basis on return. Respond with Form 8949 basis adjustment and documentation.
- Proceeds vs gain in TurboTax for RSU?
- Enter or adjust basis so software computes gain, not proceeds alone. See TurboTax guide.
When a CPA is worth it
- IRS notice taxing full proceeds with no basis adjustment accepted.
- Corporate action changed share count and proceeds do not match lots.
- Multiple brokers reporting same sale.
- International tax reporting on U.S. .
Sources and notes
Primary tax claims on this page are supported by the official and secondary sources below. Broker and software links describe reporting mechanics — confirm rules against IRS or state guidance.
1099-B proceeds vs capital gain after vest FMV basis on RSU sales.
- About Form 1099-B — Proceeds from Broker and Barter Exchange Transactions
Internal Revenue Service · Official
Broker reporting of sales proceeds and basis; basis on 1099-B may be incomplete for equity-compensation shares.
- IRS Publication 525 — Taxable and Nontaxable Income
Internal Revenue Service · Official
Covers compensation income from stock-based pay, including restricted property under section 83.
- Filing taxes for restricted stock, RSUs, or performance awards (tax guide PDF)
Fidelity Stock Plan Services · Brokerage explainer
Explains W-2 vest income, 1099-B with $0 basis, supplemental adjusted cost basis, and Form 8949 reporting.
Related calculators
- RSU Cost Basis Calculator
Cost basis on sold RSUs usually ties back to vest FMV already taxed as wages — this tool helps you model that link.
- 1099-B RSU Adjustment Helper
Structured helper for RSU 1099-B problems — zero basis, duplicate wage reporting, and supplemental plan lot details.
- RSU Sale Tax Calculator
Estimate capital gain tax on RSU share sales using vest FMV as basis — separate from vest wage tax already on your W-2.
Related pages
- How to Calculate RSU Cost Basis
RSU cost basis is generally vest FMV per share already taxed as wages — proceeds minus that basis is capital gain on Form 8949.
- Form 8949 Adjustment Codes for RSU Sales
RSU sales with missing 1099-B basis use Form 8949 adjustment codes per IRS instructions — enter vest FMV as basis adjustment before Schedule D.
- Are RSUs Taxed Twice?
Vest income and later sales can both show up on tax forms — that is not always double tax on the same dollars.
- Schedule D for RSU Sales
RSU sales go on Form 8949 and Schedule D with basis tied to vest wage income — separate from W-2 vest reporting but connected through cost basis.
- RSUs on 1099-B: What to Look For
1099-B for RSUs often shows low or zero basis — that does not mean your true basis is zero.
- CP2000 Notice for Equity Compensation
CP2000 notices often flag 1099-B proceeds without matching basis — common when RSU sales report $0 cost basis despite vest wages on W-2.
For learning, not filing
VestingTax.com is not a CPA firm or tax preparer. Grants, employers, and states all differ. Use the cited IRS and state sources above, your own documents, and a qualified tax professional before you make decisions from this guide.