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RSUs are not eligible for an 83b election.
by kasey_junk 4y ago
RSUs are not eligible for an 83b election.
- JumpCrisscross 4y ago> RSUs are not eligible for an 83b election I may have misread, but I think OP implied everyone would have been better off with options. There were a few years when RSUs were the craze, but they mostly screw holders.
- kasey_junk 4y agoThe article is a bit of a mess as it says “exercise restricted stock units” which is not a thing. Other reports have said that Stripe is raising to cover RSU tax bill that would come from letting them vest in order to prevent the RSU from expiring.
- panopticon 4y agoHow do RSUs mostly screw holders compared to options? I don't have a lot of experience with options, but they generally seemed riskier.
- choppaface 4y agoWith RSUs, if you are taxed on receiving them in any way and yet they are not liquid or you decide not to liquidate them, then the RSU price could go to zero and you’ve lost more than everything because you can’t necessarily recoup the taxes. That said ISOs have similar risk but additionally you could lose whatever you paid to exercise and also you could incur AMT which complicates your tax return quite a bit.
- kasey_junk 4y agoThat’s not how it _should_ work. RSU grants are normal income. Taxes should be withheld as such by the granter. Which is the assumed reason Stripe is raising money. Because they are on the hook for withholding and must pay that bill in cash. Now, like all income if you set your withholding incorrectly you can owe at the end of the year.