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Financial Planning / Tax Strategies


Subject:  Re: Paying taxes on vested RSUs Date:  10/29/2012  6:58 PM
Author:  ptheland Number:  116860 of 127753

As usual, I agree with Phil.

But I've also seen one minor difference in the details of the transaction. One company I've seen RSUs in treats the withholding of shares as if the shares were really withheld. So the 1099B issued is only for the net shares after the tax withholding.

Effectively, receiving the vested shares is a paycheck, but with the net pay being delivered in company shares rather than cash. You must then sell the shares to get the cash you really want. So you have two transactions: the receipt of shares (reported on your W-2) and the sale of those shares (reported on a 1099B).

The sale will result in a small gain or loss. The shares you received will be valued at some average price for the day. But you will sell at whatever the market price is at the moment you sell. That could be more or less than the day's average.

At any rate, hang on to all of the paperwork associated with the receipt of the shares and their sale. You will need it for your tax return.

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