I was given restricted shares on July 04. After two years, I was fully vested. What would be the cost basis?

Question

I sold the stock after I became vested and I received a 1099B. I also had to pay 40% as a gift tax.

Answer 1

If they were given to you, your basis would be 0.00 If they were part of a compensation package they are similar to receiving a paycheck, but you were never taxed on it, so the IRS will cast your basis as 0.00 and tax you on the full sale price of them.

Answer 2

Your basis would be what you actually paid for them. If that's zero, then your basis is zero.

If some value was included that year on your W-2 as income, and you paid taxes on it, then the amount that was added due to the stocks would be your basis. But otherwise, it's zero.