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No. RSUs are not stock options. They're taxed at their current value when they're given to you.
by ohazi 9y ago
No. RSUs are not stock options. They're taxed at their current value when they're given to you.
- kspaans 9y agoRight, I was assuming sjg007 was talking about tax treatment of the capital gains if you hold onto the stock after the RSUs vest.
- umanwizard 9y agoI still don't get how there's any way holding it instead of selling it reduces taxes. If you sell on vest, you pay income tax and 0 capital gains. If you sell after vest, you pay the same amount of income tax, and possibly nonzero capital gains.
- kspaans 9y agoYes, I think the clarification needed was that you can reduce capital gains tax rates but not income tax rates.
- klipt 9y agoBut you don't have to hold $company stock to do that. You can sell on vest for 0 capital gains, then buy diversified index funds and hold those long term.
- kspaans 9y agoAnd that's indeed what I do! ;)
- skookum 9y agoThere is no clarification to be made. There is no way to reduce taxes on RSUs by holding onto them longer. When $100 of RSUs vest, you get taxed on $100 of income. You can either keep the stock or immediately sell it with no further tax event related to that initial $100 whichever of the two options you choose. If you keep the stock, it is equivalent to having bought $100 of stock at that instant. Psychology aside, the hold versus sell-on-vest decision should be predicated entirely on whether you would have bought that amount of stock with your own cash at its vest price.
- AnimalMuppet 9y agoWell... if it's worth $X when it vests, you pay income tax on $X. If it's worth $Y when you sell, you pay capital gains on $(Y - X), presuming you held it longer than a year. If it was less than a year, you pay income tax on $(Y - X). At least, that's my understanding. I'm not a tax accountant, though. This is not financial advice.