Is the vesting of my restricted stock a wash sale? The wash sale rule disallows the loss on a sale of stock if the same type of stock is For access to this answer, please sign in or register . Restricted Stock Units (RSU) Sales and Tax Reporting posted on February 25, 2008 263 Comments RSU stands for Restricted Stock Units. It’s the new form of stock-based compensation that has gained popularity after the employers are required to expense employee stock options. Restricted stock and RSUs are taxed differently than other kinds of stock options, such as statutory or non-statutory employee stock purchase plans (ESPPs). Those plans generally have tax It seems that the conventional wisdom here is to immediately sell RSU (Restricted Stock Unit) grants upon their vesting. However, I'm curious if there would be circumstances or reasons why someone would not, or should not, do so? How to avoid the tax traps of restricted stock units. Published Mon, Jul 20 2015 8:00 AM EDT. Bijan Golkar, CEO and senior advisor at FPC Investment Advisory. Restricted stock units are a way an employer can grant company shares to employees. The grant is "restricted" because it is subject to a vesting schedule, which can be based on length of employment or on performance goals, and because it is governed by other limits on transfers or sales that your company can impose.
It seems that the conventional wisdom here is to immediately sell RSU (Restricted Stock Unit) grants upon their vesting. However, I'm curious if there would be circumstances or reasons why someone would not, or should not, do so? Ever since I wrote Restricted Stock Units (RSU) Sales and Tax Reporting, I received many questions. They all relate to sell-to-cover, which is the default, and often the only option people have for their restricted stock units (RSU). I must have not been crystal clear in my previous post. Otherwise I would not have received so many questions.
9 Mar 2019 The saving grace of making a poor stock or mutual fund investment in a But for the wash-sale rules to come into play, the stocks or securities 5 Dec 2017 And you can see the wash sale rule becomes an issue when you want to sell a stock or security to harvest a tax-saving capital loss yet still want to Wash Sale Rules: The wash sale rules in the U.S. tax code disallow taking a tax loss relating to a sale of stock if, within a period beginning 30 days before or ending 30 days after the sale, you acquire substantially identical stock. If you plan on selling other company stock at a loss, ask a tax advisor whether the grant or the vesting is considered an "acquisition" that may defer recognition of the loss and carry it forward to the shares delivered at vesting. For restricted stock, I think the vesting date meets the requirements of the second wash sale trigger from IRS Pub 550: Wash Sales: Acquire substantially identical stock or securities in a fully taxable trade. I base this on these two quotes from IRS Pub 525: Restricted Property: The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss and, within 30 days before or after this sale, buys a “substantially identical” stock or Is the vesting of my restricted stock a wash sale? The wash sale rule disallows the loss on a sale of stock if the same type of stock is For access to this answer, please sign in or register .
7 Aug 2019 When your company gives you restricted stock units (RSUs), you don't stock, you can buy it back later, but be careful of the wash sale rule. 25 Feb 2008 ap – You only worry about wash sale when the sale resulted in a loss. If a broker isn't involved, the company's sell-to-cover usually creates 11 Apr 2011 RSU stands for Restricted Stock Unit. It's a form of equity-based compensation. The employer gives an employee a number of RSU. 9 Mar 2019 The saving grace of making a poor stock or mutual fund investment in a But for the wash-sale rules to come into play, the stocks or securities 5 Dec 2017 And you can see the wash sale rule becomes an issue when you want to sell a stock or security to harvest a tax-saving capital loss yet still want to Wash Sale Rules: The wash sale rules in the U.S. tax code disallow taking a tax loss relating to a sale of stock if, within a period beginning 30 days before or ending 30 days after the sale, you acquire substantially identical stock. If you plan on selling other company stock at a loss, ask a tax advisor whether the grant or the vesting is considered an "acquisition" that may defer recognition of the loss and carry it forward to the shares delivered at vesting.
A restricted stock unit is a substitute for an actual stock grant. If your company gives you an RSU, you don't actually receive company stock. Rather, you receive units that will be exchanged for actual stock at some future date. A Restricted Stock Award Share is a grant of company stock in which the recipient’s rights in the stock are restricted until the shares vest (or lapse in restrictions). The restricted period is called a vesting period. Once the vesting requirements are met, an employee owns the shares outright and may treat them as she would any other share of stock in her account. It seems that the conventional wisdom here is to immediately sell RSU (Restricted Stock Unit) grants upon their vesting. However, I'm curious if there would be circumstances or reasons why someone would not, or should not, do so? Ever since I wrote Restricted Stock Units (RSU) Sales and Tax Reporting, I received many questions. They all relate to sell-to-cover, which is the default, and often the only option people have for their restricted stock units (RSU). I must have not been crystal clear in my previous post. Otherwise I would not have received so many questions. A restricted stock unit (RSU) is one of the packages of equity compensation offered by a company to its employees in terms of company shares. However, the shares of the company are given to the employees on the future date as per the vesting plan of the company. CPA Tax Help: Wash Sale Rules; If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. Restricted stock becomes income when it