Basic Questions on Capital Gains

Feb 28, 2010 2 Replies
R

This is the first time that I have to fill 1040-Schedule D. So please tolerate some ignorance on the questions. I sold a number of ESPP and RSU in 2009



  1. Cost or other basis: Should I add income tax upon the purchase price? Can the brokerage commission fees be added too?


  1. For RSU, there were shares withhold for tax. But from the UBS statement, it states 0 federal tax withhold in 1099-B form line 4. Is that something I have to ask UBS to correct it?



Thanks lot.



Richard


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A

Are you sure in each case that the federal income tax withheld was not added to your W-2 form? Can be confirmed by checking paystubs.

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S

Income tax isn't part of your cost basis. But your cost basis includes the discount that was taxable income to you (e.g., you actually paid $17/share, which represented a 15% discount, so when you sold the stock, $3/share is wage income from your company, so your basis is $20.)

Did you authorize the company to sell shares so they could withhold income tax? If so, was the tax withheld part of your W-2?

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