Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121312  
Subject: Re: Question about restricted stock Date: 9/10/2012 3:21 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
Double check the paperwork on the restricted stock vesting. It's not unusual for the FMV of the vested shares to be included on your W-2 (your wife's in this case) in the year the shares vest.

If that is correct for you, then the cost basis of the shares is that FMV that you already included in your income, and your holding period began on the vesting date. You'll need that when you sell the shares.

Here's an example with easy numbers. You vest in 1000 shares with a FMV of $10 on the vesting date. 300 shares are withheld for taxes, so you actually receive 700 shares.

The W-2 should include $10,000 of additional income for the vested stock. (That's 1000 shares at $10 each.)

A total of $3,000 (300 shares at $10) appear in various withholdings: Social Security, Medicare, Federal income tax, and state income tax (as appropriate).

You received 700 shares with a value of $7,000. That is your basis in the shares.

In a way, it's pretty much just like any other paycheck you get. Except the pay and withholdings start off in shares of stock rather than in dollars.

--Peter
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Macro Economics

The Deflationary Cycle Explained
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement