META RSU Sell-to-Cover Basis Defense
PROOF LOG #020
META RSU Sell-to-Cover Basis Defense
Sell-to-cover was not the end of the lot.
Broker records can make the later net-share sale look like a new basis problem.
The remaining META shares still carry W-2 basis from the vest.
Sell-to-cover was not the end of the lot.
In this META RSU case, 10,000 shares vested, 4,500 shares were sold to cover tax withholding, and 5,500 net shares were sold later.
FDL shows that the later sale still carried $1,309,550 of surviving §83 basis.
Proof Summary
Problem: RSU sell-to-cover does not necessarily close the tax lot when net shares survive.
Prepared input: FDL treats the vest as the §83 basis event, the sell-to-cover as a partial depletion, and the later sale as a separate disposition.
Board result: Tax Report separates the STC SHORT row and later-sale LONG row, while Audit Trail preserves one vest lot, two depletions, and full closure.
Boundary: FDL does not replace payroll or CPA judgment. It verifies prepared, in-scope RSU records through deterministic tax-lot outputs.
WATCH THE RECONSTRUCTION
Watch surviving RSU basis move from vest, through sell-to-cover, into the later sale.
- META RSUs vested with $2,381,000 of W-2 / §83 basis
- 4,500 shares were sold same day for tax withholding
- 5,500 net shares survived after sell-to-cover
- the later sale still carried $1,309,550 of surviving §83 basis
- Tax Report separates the STC SHORT row and the later-sale LONG row
- Audit Trail proves one vest lot, two depletions, and full closure
EXECUTIVE PROOF
Broker / Surface Risk
- RSU release may arrive as basis-not-reported
- sell-to-cover can make the original vest lot look finished
- later net-share sale can look like missing or noncovered basis
- the reviewer must prove whether the basis survived
FDL Registry of Truth™
- VEST establishes §83 basis
- sell-to-cover consumes only part of the vest lot
- surviving 5,500 shares keep §83 basis
- later sale uses surviving basis
- Audit Trail preserves the full lot path
PHASE 1 — THE VEST
10,000 META RSU shares vested in the 2023 May RSU lot.
The vest established $2,381,000 of W-2 / §83 basis.
That basis is the starting point of the lot record.
RSU basis starts at vest, not at the later sale.
PHASE 2 — THE SELL-TO-COVER
4,500 shares were sold the same day for tax withholding.
That sale consumed part of the vest lot.
It did not erase the remaining basis.
Sell-to-cover was a partial depletion, not the end of the lot.
PHASE 3 — THE LATER SALE
5,500 net shares were sold later in the 2026 April sale.
The later sale carried $1,309,550 of surviving §83 basis.
Tax Report shows the later sale as LONG.
FDL makes the surviving RSU basis reviewable.
FORENSIC EVIDENCE
What must remain intact
- §83 vest basisThe $2,381,000 W-2 basis established at vest must remain connected to the lot record.
- STC depletionThe 4,500-share withholding sale must consume only part of the vest lot.
- Surviving net sharesThe remaining 5,500 shares must keep $1,309,550 of basis for the later sale.
- Term distinctionThe STC row and the later-sale row must remain separate filing-facing events.
What FDL makes legible
- Tax Alpha DashboardShows the $2,381,000 W-2 Basis (§83) Shield.
- Tax ReportShows two rows: the STC SHORT row and the later-sale LONG row.
- Audit TrailShows one vest lot, two depletions, and full closure.
- TransactionsShows RSU vest, automatic sale to cover tax withholding, and later sale.
This is the point of the white-box architecture:
vest basis, withholding sale, later sale, and audit trace stay separate and reviewable.
WHY THIS CASE MATTERS
For UHNW equity-comp clients, the dangerous part is not only the vest.
It is what happens later, when net shares are sold after the original stock-plan event has faded from view.
The question is not just whether the shares were sold.
The question is whether the reviewer can prove that the surviving basis stayed attached.
WHAT FDL IS SHOWING HERE
FDL is not doing equity-comp advice.
FDL is not replacing payroll or CPA judgment.
FDL shows how prepared RSU records move through Tax Alpha Dashboard, Tax Report, and Audit Trail.
The value is making surviving §83 basis reviewable.
CHOOSE YOUR NEXT STEP
FDL — deterministic tax infrastructure for prepared, in-scope records.