I am filing a return for someone who received Restricted Stock Units (RSU's) from their employer. The RSU's were taxed at the time they vested, and were "sold to cover." The RSU value at vesting is included on her W-2 as income in Box 1 ($9,000). She also received a 1099-B from her investment company showing Cost Basis of $5,300 and Sales Proceeds of $5,000. I understand that the Cost Basis that must be reported on Schedule D is the W-2 amount of $9,000. This results in a net capital loss on her Schedule D of $4,000 ($9,000 - $5,000). Is that correct?? FYI - this is the only investment activity for the year. Thanks!!

If I read you post correctly, the granting of the stock option is being taxed as ordinary income on her W-2.

That being the case, the sale DOES have to be reported on Schedule D (due to the Form 1099-B being sent ot the RS0, but you would show the stock sale proceeds as $5,000 and the basis as $5,000, reflecting NEITHER a capital loss nor a capital gain.

If there were some commissions paid to the brokerage firm, those commissions can be added to the basis to generate a small loss.

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