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RSUs and 1099Bs

We had RSU (restricted stock units) vest this year.
We added the value of the stock to the employee W-2 as compensation for 2017.
Some employees sold shares back to the company to cover the taxes.
Does the sale back to the company need to be recorded on a 1099 B?
Or since it is a no gain transaction no reporting needs to be done?
For example the employee received 100 shares of stock valued at $10/share. So the W2 compensation was adjusted to reflect the $1000 of compensation income.
They sold 30 shares back to cover the withholding taxes - $10 * 30 shares = $300 paid toward withholding taxes
Since the acquisition price of $10/share and the sale price of $10/share are the same - there is no gain or loss - does the sale still have to be reflected on a 1099 form?


  • To my knowledge this is a W2 transaction reported at the gross amount. Plus some Box something or other reporting. I have done stock reporting for a fortune 500 company and our Big-4 CPA firm blessed the procedure. I am pretty sure that if you look at the W2 instructions, Restricted Stock and RSU are explicitly mentioned.

    It is almost unheard to use 1099 anythings to report compensation to current or former employees. IRC 3401 and 3402 are very clear that ALL employee compensation is wages unless explicitly excepted. 1099 by definition is income, but not wages. Your starting point to using a 1099 is a claim that this payment was unrelated to the recipient EVER being an employee. (IRC makes almost no distinction between current and former employees).

    If you have an actual source that says something else, I would be very interested in seeing it. BenefitLinks is where the benefits heavy hitters hand out if you want an informed 2nd opinion. Some variant of this subject comes up several times a year, and we are still waiting for ANY source that says you can report employee compensation on 1099s.

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