How is the cost basis calculated for the former VMW shares? On E-trade, I saw the cost basis for AVGO shares is $0, does that mean if we sell, all the sale amount will be taxable? Doesn’t seem right to me because we paid for the VMW ESPP shares and the RSU shares were already taxed when vested. What about for the cash portion?
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The cost basis for RSU's is calculated upon vesting (the current market price)
Correct. Usually etrade reports it correctly on 1099 as well (at least my 1099s have always been correct).
and the appropriate number of shares are deducted for taxes right away.
Depends on what you mean by appropriate. They take a flat % regardless of who you are. For most people with RSUs, it is not appropriate and you should expect to pay more in taxes. If the difference is large (and makes a large difference between your previous and current year tax returns), you may need to pay a quarterly tax payment to avoid penalty -- that would be rare and hard to get to unless you've massively increased your tax burden.
Cost basis supplemental report is available in tax documentation where you see 1099. If you have sold your shares during the year then they will show up in your 1099 as sales. On 1099 cost basis will be $0 and when you import it into a tax software it will import as $0. Then you have to correct it in your tax software (or your CPA needs to do it) to enter correct cost basis from the report. This happens only if you sold vested RSU shares. If you sell ESPP acquired shares then ETrade shows correct cost basis in 1099 and it will import correctly in Tax software (better to cross check with supplemental report). I have always seen it this way since last 3 yrs.
Do some research before posting nonsense, have you never received RSUs? The cost basis for RSU's is calculated upon vesting (the current market price) and the appropriate number of shares are deducted for taxes right away.
@dfd+1pR9D6lJ or @rxk+1pR9D6lJ or anyone else who know
So when we sell even if it says cost basis is 0, etrade will provide supplemental cost basis report along with 1099 and we need to change the cost basis value based on this report? Where can I this report in etrade?
My RSUs were never the full amount when vested, for example 2020 covid RSUs 25 shares, I only got 16 when vested, for tax. And for ESPPs, we also have paid to get the shares, so the cost basis for that shouldn’t be zero.
It’s not 0.252 x vmw shares, but 0.252 x vmw shares x 0.52 (if you elected to have 100% stock, less if for whatever reason you didn’t elect 100% stock)
You have to look for the supplemental documentation from E*Trade for the cost basis. Cost basis is not 0. You will be paying a lot of taxes if you take cost basis as 0.
I can see AVGO stocks in Etrade now, however, the number of AVGO shares is way less than what is supposed to be ( Number of VMware Stocks x 0.252), any one else facing the same issue?
Uh, RSUs 9no matter where they come from) are 0 dollar cost basis. You are getting them without paying anything. So yes, when you sell, you pay income taxes on the entier amounts (if short term hold) or if you hold the stock once released for more than a year you hit long term cap gains.
Just like before this mess
When are they going to release the vested RSUs from November 1?