The cost-basis problem
When you sell shares from RSUs, non-qualified options, or ESPP purchases, your broker issues a Form 1099-B. For shares acquired through compensation, the cost basis shown on that form often leaves out the income you were already taxed on through your W-2. For RSUs it can show a basis of zero. For options it may show only the exercise price.
If that number goes onto your return unadjusted, the compensation income is taxed twice: once as wages, and again as capital gain. The fix is an adjustment on Form 8949 using the correct basis, which usually comes from a supplemental statement your stock plan administrator provides. Your CPA can make the adjustment only if they have that statement.
The checklist
Every year with equity compensation
- Form W-2. Includes income from RSU vests, NQSO exercises, and disqualifying ESPP dispositions. Some employers break it out in box 12 or box 14.
- Form 1099-B and the supplemental statement. Ask your broker or plan administrator for the supplemental or "adjusted cost basis" statement that accompanies the 1099-B.
- Year-end stock plan statement. Shows vests, exercises, withholding, and shares sold to cover taxes.
If you exercised incentive stock options
- Form 3921. Reports each ISO exercise, including the exercise price and market value. Your CPA needs it to calculate AMT.
- Prior-year Form 8801 or AMT credit carryforward. AMT paid on ISO exercises in earlier years can create a credit usable later, but only if someone tracks it.
- Records for two cost bases. ISO shares held past year-end can have one basis for regular tax and a different one for AMT.
If you participate in an ESPP
- Form 3922. Reports each ESPP purchase, including the offering-date and purchase-date values that determine ordinary income on a sale.
- Sale details by lot. Whether a sale is a qualifying or disqualifying disposition changes how much is ordinary income. For qualifying dispositions, some of that income may not appear on your W-2 at all.
If any of these apply
- 83(b) election. A copy of the election and proof of timely filing. See our post on the 83(b) election.
- You moved states. Your work location history, since a former state may tax equity compensation earned while you worked there.
- Charitable gifts of stock. Acknowledgment letters and the lots donated.
- Estimated payments. Dates and amounts, since withholding on equity income often falls short.
Hypothetical example: Meet "Sam," a director who sold RSU shares this year. The 1099-B shows a cost basis of zero. Sam's W-2 already includes the value of those shares at vest. With the supplemental statement, Sam's CPA reports the correct basis and the sale shows only the small change in value since vest. Without it, the full sale price would appear as gain.
Talk before December, not in April
By the time your CPA sees the forms, the year's decisions are fixed. The time to coordinate is the fourth quarter, while there is still time to adjust an exercise, a sale, a charitable gift, or an estimated payment. A multi-year tax projection gives that conversation a shared starting point.
How the work divides
Skyview does not prepare or file tax returns. Our role is planning: projecting the tax effect of vests, exercises, and sales; timing decisions across years; and making sure the documents your CPA needs exist and reach them. Your CPA prepares and files the return and makes the technical calls. With your permission, we talk directly with your CPA so you are not the messenger between us.
Common mistakes
- Reporting the 1099-B cost basis for compensation shares without adjusting it.
- Not tracking an AMT credit from an earlier ISO exercise.
- Missing ordinary income from a qualifying ESPP sale that is not on the W-2.
- Assuming withholding at vest or exercise covered the full tax.
- Bringing the CPA in only after the year has closed.
Important: Skyview Financial Group does not prepare or file tax returns or provide legal advice. This checklist is general education; your CPA determines how items are reported on your return.
Related: our RSU tax withholding guide and our tax-aware strategies.
Disclosure: Skyview Financial Group, LLC is an SEC-registered investment adviser (CRD #310581). This content is educational only and is not individualized tax, legal, or investment advice. Skyview Financial Group does not prepare or file tax returns. Figures and rules cited are current as of October 2026 and subject to change; please consult your CPA and, where applicable, legal counsel. Examples are hypothetical and do not reflect any specific client.