Form 1099-B
Cost Basis
Stock Compensation
RSU
Double Taxation
Form 8949

Form 1099-B and Stock Compensation: What to Do

Simple guide to Form 1099-B when you have stock options or RSUs. Learn why the cost basis might be wrong, how to fix it, and avoid double taxation.

4 min read

Executive Summary

Quick Answer

Why does my 1099-B show $0 cost basis for RSUs?

Brokers often report $0 or incorrect cost basis for RSUs because they don't have your vesting information. When RSUs vest, the value is taxed as income (on your W-2). That same value is your cost basis when you sell. If you use $0 on your tax return, you'll pay tax again on the full sale amount—double taxation. You must report the correct basis on Form 8949.

Source: IRS Form 1099-B

You sold some RSUs. Your broker sent a 1099-B. You look at it and see $0 cost basis. That can't be right, can it? It's wrong—and if you don't fix it, you'll pay tax twice on the same money.

The bottom line: For RSUs, your cost basis is the value when they vested. You already paid income tax on that (it's on your W-2). When you sell, you only owe tax on the gain—the difference between sale price and that basis. If the 1099-B says $0, the IRS might think your entire sale is gain. You have to correct it. See our cost basis guide for the full picture.


Why the 1099-B Is Often Wrong

Brokers get information from the company when you sell. For RSUs, the company often reports the sale but not the vesting value. The broker doesn't know what you were taxed on at vesting. So they report $0 or "non-covered" (meaning they're not sure).

You know the correct basis—it's the value on your vesting date. You have to tell the IRS.


What Is Cost Basis?

Cost basis = what you "paid" for the shares for tax purposes.

Equity TypeCost Basis
RSUsValue when they vested (same as W-2 income)
NSO exerciseStrike price + amount taxed at exercise
ISO (qualifying)Strike price (you weren't taxed at exercise)
ESPPDepends on qualifying vs. disqualifying disposition

How to Fix It on Your Tax Return

Step 1: Get Your Correct Basis

For RSUs: Check your vesting statements or W-2. The amount in Box 1 (or the supplemental info) for RSU income = your basis for those shares.

Step 2: Report on Form 8949

When you file, you'll use Form 8949 to report the sale. In the "Cost or Other Basis" column, enter your correct basis—not the $0 from the 1099-B.

Step 3: Use the Right Code

In the "Code" column (usually column f), use B if you're correcting the basis the broker reported. This tells the IRS you're making an adjustment.

Step 4: Reconcile with W-2

Your total proceeds and basis should match your records. The gain (or loss) you report should reflect the real economics: sale price minus vesting value.


Example

You vested 100 RSUs at $50/share = $5,000. That's on your W-2. You sold them at $60/share = $6,000.

  • 1099-B might say: Proceeds $6,000, Basis $0 → "Gain" $6,000 (wrong!)
  • Correct: Proceeds $6,000, Basis $5,000 → Gain $1,000 (right!)

The $5,000 was already taxed at vesting. You only owe tax on the $1,000 gain. Using $0 basis would make you pay tax on $6,000—six times too much.


Frequently Asked Questions

What if I don't have my vesting records?

Check your brokerage account—many show vesting history. Or ask your employer's equity administrator (Carta, E*TRADE, etc.). Your W-2 should also show RSU income by vesting event in some cases.

Do I need to send a corrected 1099-B to the IRS?

No. You report the correct numbers on your return (Form 8949). The IRS gets the 1099-B from the broker. Your return shows your adjustments. They'll match them up.

What about "covered" vs "non-covered" shares?

Covered = broker has basis info and reports to IRS. Non-covered = broker isn't sure. For RSUs, they're often non-covered. You're responsible for reporting the correct basis either way.


Disclaimer: This guide is for educational purposes. It does not constitute tax advice. Your situation may vary. Consult a tax professional.


Last Updated: March 2026 | Research Team: VestingStrategy

Disclaimer

This article is for educational purposes only and discusses legal tax optimization strategies. Tax evasion is illegal and is not discussed or recommended. The information provided does not constitute tax, legal, or financial advice.

Tax laws vary by jurisdiction and change frequently. Always consult a qualified tax professional (CPA, tax attorney, or enrolled agent) before making decisions based on this content. The authors and operators of this website accept no liability for actions taken based on this information.