You’re taxed once at vesting
When RSUs vest, the fair market value of the shares is employment income, taxed at your marginal rate and reported on your T4. That’s tax event number one — and it already happened before you sold anything. Your employer often sells some shares at vest to cover the withholding.
How the second tax sneaks in
The brokerage that holds your vested shares frequently reports a cost basis of $0, or leaves it blank, on the T5008 — because it didn’t see you “buy” them. If you transcribe that figure, your capital gain becomes the entire sale price, and you pay capital gains tax on value you already paid income tax on.
What it costs
Say 100 shares vest at $50 — $5,000 of employment income, taxed. You later sell at $55 for $5,500.
- Correct: gain = $5,500 − $5,000 = $500. You’re taxed on a $500 capital gain.
- Trap ($0 cost base): gain = $5,500 − $0 = $5,500. You’re taxed again on the $5,000 you already reported as income.
The error can cost thousands, and it recurs every vest.
Fixing it
Override the broker’s cost basis with the vest-date market value from your equity portal or T4 support. If you’ve already filed with a wrong basis, an adjustment can recover the overpaid tax. The durable fix is tracking each vest’s market value as it happens, before the slip arrives with a zero in the box.