RSU Cost Basis: Why Your 1099-B May Show $0 and How to Fix It on Form 8949

Once RSU shares are delivered to your brokerage account, they are ordinary stock. Later gains and losses are capital gains and losses, the holding-period clock runs the same way, and the same wash-sale rule applies. The place where their origin keeps costing people money is Form 1099-B. For awards granted after 2013, federal reporting rules bar your broker from adding the wage income you recognized at vest to the basis it reports.¹ Brokers handle that differently on the copy you receive. Fidelity says RSU basis will often show as $0 or a blank box, with the vest-date value on a separate form that tax software does not import. Schwab, and E*TRADE starting with 2025 forms, print the vest-date value but do not report it to the IRS.¹⁰¹¹¹² Your W-2 already taxed that value. A return that uses a $0 basis taxes the same dollars a second time as a capital gain.

On one 100-share vest at $200 a share, that second tax falls on $20,000 of wages, which at a 32% federal rate is $6,400. The correction goes on Form 8949, and the figures it needs are in documents your broker and employer already send you.

What you own at grant, vest and settlement

An RSU grant is a contract. Until shares are delivered you hold a promise, and the IRS audit guide for equity compensation describes RSUs as “unsecured, unfunded promises to pay cash or stock in the future”.² Treasury regulations exclude “an unfunded and unsecured promise to pay money or property in the future” from the meaning of property under Section 83,³ which is why no 83(b) election is available for RSUs. Award agreements use the same language. Apple’s form of RSU agreement calls the units “an unfunded and unsecured right to receive Shares” that “shall not be treated as property,” with no dividend or voting rights until shares are “actually issued to and held of record by the Participant.”¹³

Vesting is the date your conditions are met. Settlement is the date the shares are delivered, which can come later: Adobe’s agreement allows up to 30 days after vesting, and Apple’s up to two and a half months.¹³¹⁴ The audit guide places the Section 83 event at delivery: RSUs settled in stock are subject to Section 83 “only when the stock is actually transferred to the employee.”² The value delivered is wages, reported on your W-2 and subject to income tax withholding, Social Security and Medicare. From then on the shares have the two attributes any stock has: a basis that includes the amount taxed as income, and a holding period that begins just after they are delivered to you vested.³⁴

What stays different after settlement

Two consequences follow from the first rows. Holding settled shares for a year changes the tax on appreciation after settlement and nothing else, because the vest-date value was taxed as wages the day it arrived. And selling recently settled shares, for a down payment or anything else, realizes almost no gain, because your basis is the price you just paid in wages. Whether to keep them is the same question as whether you would buy that much of your employer’s stock with cash today, which our guide to selling RSUs at vest works through.

Why the 1099-B basis is $0 or missing

The rule is in the broker-reporting regulations. For stock received through “the vesting or exercise of other equity-based compensation arrangements, granted or acquired on or after January 1, 2014,” a broker “may not increase initial basis for income recognized” on vesting.¹ The broker knows what you paid for the shares, which for an RSU is nothing, and is barred from adding what you were taxed on. The 2026 Form 1099-B instructions repeat the rule.⁵

The same regulations treat stock your employer grants you as a noncovered security, because you did not acquire it for cash.¹ For a noncovered sale the broker may leave box 1e blank, show a basis without reporting it to the IRS (box 12 unchecked), or report a basis anyway (box 12 checked).⁵ Three widely used stock-plan brokers each describe a different approach in their current tax guides:

The E*TRADE change matters for anyone fixing a past year: through the 2024 forms its box 1e showed $0 for RSU shares, with the wage income only on the supplement.¹² A return filed straight from that form overstated the gain.

One vest, two sales

Take one vest of 100 shares at $200 a share for an employee in a state with no income tax. Withholding at 22% federal plus 7.65% for Social Security and Medicare comes to 29.65%, and the plan sells 30 shares at vest to cover it, rounding up to a whole share. Four months later the employee sells the other 70 shares at $230.

The $20,000 gap between the two gain columns is the vest itself, which is already on the W-2. Both sales are short-term, so at a 32% federal rate the uncorrected return overstates federal tax by $6,400 for this one vest. Fees, and the difference between the sale price and the settlement value, make the real sell-to-cover result a few dollars of gain or loss rather than exactly zero.

If the plan used net share settlement instead, holding back the 30 shares rather than selling them, those shares never pass through your brokerage account and you have no sale to report for them. Only the 70-share sale appears, and the overstatement at 32% is $4,480.

Check a lot from your 1099-B

Enter one sale. The defaults are the 70-share sale above with a $0 basis reported to the IRS, the case that needs a column (g) adjustment.

Fixing it on Form 8949

1. Find the settlement value for each lot. It is on Fidelity’s Supplemental Information form, E*TRADE’s Stock Plan Transactions Supplement, Schwab’s 1099-B itself, and the vest or release confirmation for each lot. The total of all your vests for the year is already inside W-2 box 1.
2. Match each 1099-B sale to its lot. Each lot’s basis is its share count times its per-share value at settlement.
3. Use the box the 1099-B points you to. If box 12 is checked, the sale belongs in box A (held a year or less) or box D (more than a year): enter the 1099-B basis in column (e), code B in column (f), and the correction as a negative number in column (g). If box 12 is unchecked, the sale belongs in box B or box E: enter the correct basis in column (e), and if box 1e showed a wrong amount, add code B in column (f) and 0 in column (g).⁶
4. Report the vest income once. It is wages in W-2 box 1 and does not go anywhere else on the return.

Tax software usually handles this in an adjusted-basis or employee-stock step after the 1099-B import. Check that the finished Form 8949 shows the corrected basis and, where the rules call for it, code B. If an earlier return used the broker’s $0, Form 1040-X can claim the refund, generally within 3 years after you filed that return or 2 years after you paid the tax, whichever is later.⁷

Wash sales around a vest date

A vest can also cost you a loss. The wash-sale rule disallows a loss when you acquire substantially identical stock within 30 days before or after the sale. IRS Publication 550 illustrates it with stock received as pay: an employee sells bonus shares at a loss, and if another bonus award of the same stock arrives within 30 days, “you cannot deduct your loss on the sale.”⁸ No IRS document addresses RSUs by name, but a settlement delivers stock as pay in the same way, so the cautious reading is that a vest inside the 61-day window around a loss sale triggers the rule for the shares it delivers. Before selling employer shares at a loss, check the vest calendar. A disallowed loss is added to the basis of the replacement shares, so it returns when those shares are sold.⁸

When the reported basis is already right

For awards granted or acquired before 2014, brokers were allowed to add the compensation income to basis, and some did.¹ Some stock-plan brokers also report the settlement value as basis, or show an adjusted figure on the supplemental statement. The test is the same in every case: if box 1e equals the share count times the settlement value, no correction is needed. Employee stock purchase plan shares have the same reporting gap with different arithmetic, because only part of the purchase discount is wages, and the calculator above does not model them.

Frequently asked questions

Are RSUs taxed twice?

Only if the return uses the broker’s basis. The value at settlement is taxed once, as wages. Correcting the basis on Form 8949 leaves only the change in price after settlement to be taxed as a capital gain or claimed as a loss.

Are unvested RSUs my property?

No. An unvested RSU is a contractual promise that you can forfeit, and Treasury regulations do not treat it as property for Section 83.³ You own shares after settlement. That is also why unvested awards are better counted at a discount, or left out, when you add up net worth; our equity compensation guide covers that.

Where do I find the value at settlement?

On the vest or release confirmation for each lot, and on the broker’s supplemental tax statement where it issues one, which lists vest dates, share counts and per-share values. Schwab prints the value in the 1099-B itself. The stock-plan website usually shows the same history.

Do I have to report sell-to-cover sales?

Yes. Shares sold at vest to pay the withholding are sales, and they appear on the 1099-B. With the basis corrected, the gain or loss on them is usually a few dollars.

Does holding RSU shares for a year make them long-term?

The shares become long-term after more than a year, counted from just after they vest, but that only changes the tax on the gain since settlement.⁹ The vest-date value stays wage income.

Can I use vested RSUs for a down payment?

Yes, the same way as any other stock. Recently settled shares carry little gain, so selling them costs little tax. Holding them until closing leaves a fixed-date payment exposed to one stock’s price in the meantime; see funding the down payment.

I already filed with a $0 basis. What now?

File Form 1040-X with a corrected Form 8949 for each affected year that is still open, generally 3 years from filing or 2 years from payment, whichever is later.⁷

Key takeaways

• An unvested RSU is a promise. Settled shares are ordinary stock with a basis equal to the value taxed as wages.
• For awards granted after 2013, brokers may not report that wage income as basis to the IRS. Some show $0 or a blank box; others show the vest-date value without reporting it.
• Using the reported basis taxes the vest value twice. On one 100-share vest at $200 sold within a year at a 32% rate, that is $6,400 of federal tax.
• Fix it on Form 8949: box A or D with a column (g) adjustment when box 12 is checked, box B or E with the correct basis in column (e) when it is not.
• A vest within 30 days of a loss sale of the same stock can disallow the loss.

Related guides

• Sell Your RSUs at Vest applies the cash-bonus test to the keep-or-sell decision.
• RSU Withholding Calculator solves for the federal rate to elect at each vest.
• RSU Tax Strategy covers vest taxation, ESPPs and common mistakes.
• One Employer, Four Exposures adds up salary, unvested grants, vested shares and home equity.
• Your Company Stock Has to Beat the Market by 3 Points a Year handles older, appreciated positions.
• Tax-Loss Harvesting explains the wash-sale rule in more depth.

Sources and method

1. Treas. Reg. §1.6045-1, Returns of information of brokers and barter exchanges. Paragraph (d)(6)(ii)(A): a broker may not increase initial basis for income recognized on the vesting of equity-based compensation granted or acquired on or after January 1, 2014, and may but need not for earlier grants. Paragraph (b)(10), Example 10: stock granted by an employer is not a covered security.
2. IRS. Publication 5992, Equity (Stock)-Based Compensation Audit Techniques Guide (6-2024), section G.3. An audit guide for examiners, which the IRS says is not an official pronouncement of law.
3. Treas. Reg. §1.83-3(e) (an unfunded and unsecured promise is not property) and §1.83-4(a) and (b)(1) (holding period begins just after substantial vesting; basis includes the amount includible in income).
4. IRS. Publication 551, Basis of Assets (12/2025). “If you receive property for services, include the property’s FMV in income. The amount you include in income becomes your basis.”
5. IRS. Instructions for Form 1099-B (2026). Initial basis for post-2013 equity compensation; definitions of covered and noncovered securities; boxes 1e, 5 and 12.
6. IRS. Instructions for Form 8949 (2025). Boxes A, B, D and E; code B for an incorrect basis in box 1e, with the correct basis in column (e) for box B or E transactions and an adjustment in column (g) for box A or D transactions.
7. IRS. Instructions for Form 1040-X (12/2025), When To File.
8. IRS. Publication 550, Investment Income and Expenses (2025), Wash Sales, including Example 2 on bonus stock awards and the rule that a disallowed loss is added to the basis of the new stock.
9. IRS. Topic No. 409, Capital Gains and Losses. Long-term means held more than one year.
10. Fidelity Investments. Stock Plan Services tax FAQs and Filing taxes for your restricted stock, restricted stock units, or performance awards. RSU basis often shows as $0 or a blank box; the adjusted basis is on the Supplemental Information form, which is not reported to the IRS and is not imported into third-party tax software.
11. Charles Schwab. Cost Basis and Tax Reporting Guide (March 2026) and Equity Award Center: cost basis. RSU shares are noncovered; the 1099-B shows fair market value as basis, not reported to the IRS; no adjustment needed, report on Form 8949.
12. E*TRADE from Morgan Stanley. 2025 Tax Filing Basics for Stock Plan Transactions (December 2025). From the 2025 Form 1099-B, basis for $0-price RSUs includes the ordinary income at vest and is displayed but not reported to the IRS; earlier forms showed $0, with the income on the Stock Plan Transactions Supplement.
13. Apple Inc. Form of Restricted Stock Unit Award Agreement under the 2022 Employee Stock Plan (Exhibit 10.19 to the fiscal 2024 Form 10-K), sections 2, 5(a) and 7.
14. Adobe Inc. 2019 Equity Incentive Plan Restricted Stock Unit Grant Notice (Exhibit 10.6 to the Form 10-Q for the quarter ended March 1, 2024), sections 5(a) and 10.
15. The worked example and calculator are reproducible from web/src/lib/rsu-basis-math.ts and its tests. Federal tax only; the calculator ignores the $3,000 annual limit on net capital losses and state tax.