3 ms·

https://www.ftb.ca.gov/forms/misc/1004.html https://www.ftb.ca.gov/forms/misc/1004.html Search for the phrase 'one reasonable method'. To me, in the contrived

https://www.ftb.ca.gov/forms/misc/1004.html https://www.ftb.ca.gov/forms/misc/1004.html Search for the phrase 'one reasonable method'. To me, in the contrived example I outlined, it seems reasonable to pay CA tax only on the first year's vest. But, from reading the linked page, I'm not sure whether the CA tax authorities could be made to see it the same way. Of course, your friends are free to declare and pay taxes as they see fit, given their understanding of the law, their risk tolerance etc.

paxys 5y ago
Most of that page deals with ISOs and NSOs, which are very different from the case you described. The section "E. Restricted Stock" is itself about Restricted Stock Awards (RSAs) NOT Restricted Stock Units (RSUs), the latter of which is what I imagine most non-executives reading this are getting. In case of RSAs you actually "own" the stock during the vesting period (including having voting rights), so it makes some sense to be taxed on it for that period. See https://carta.com/blog/breaking-down-rsas-and-rsus/ https://carta.com/blog/breaking-down-rsas-and-rsus/.
- rahimnathwani 5y ago
  It's unclear whether RSUs are covered by section E: - RSUs are a type of restricted stock, which suggests that they would be covered by section E. (supporting my earlier assumption.) - The examples in section E talk about 'purchase date' instead of 'grant date', suggesting they're talking about RSAs. (supporting your point.) However: RSUs must be covered by that publication somehow. If they're not covered by section E, then which section covers them?
  - paxys 5y ago
    RSUs are, I imagine, not covered by this page because – unlike ISO/NSO/RSAs – RSU vesting schedules are simply a vague promise by the employer and not something legally binding or formally recognized by tax authorities.
    - rahimnathwani 5y ago
      You may be right on the latter. Not sure I agree with the former. They're usually on the offer letter or employment contract.

paxys 5y ago

Most of that page deals with ISOs and NSOs, which are very different from the case you described. The section "E. Restricted Stock" is itself about Restricted Stock Awards (RSAs) NOT Restricted Stock Units (RSUs), the latter of which is what I imagine most non-executives reading this are getting. In case of RSAs you actually "own" the stock during the vesting period (including having voting rights), so it makes some sense to be taxed on it for that period. See https://carta.com/blog/breaking-down-rsas-and-rsus/ https://carta.com/blog/breaking-down-rsas-and-rsus/.

rahimnathwani 5y ago
It's unclear whether RSUs are covered by section E: - RSUs are a type of restricted stock, which suggests that they would be covered by section E. (supporting my earlier assumption.) - The examples in section E talk about 'purchase date' instead of 'grant date', suggesting they're talking about RSAs. (supporting your point.) However: RSUs must be covered by that publication somehow. If they're not covered by section E, then which section covers them?
- paxys 5y ago
  RSUs are, I imagine, not covered by this page because – unlike ISO/NSO/RSAs – RSU vesting schedules are simply a vague promise by the employer and not something legally binding or formally recognized by tax authorities.
  - rahimnathwani 5y ago
    You may be right on the latter. Not sure I agree with the former. They're usually on the offer letter or employment contract.