Tax on capital gain on the RSU

Facebook aKHq74
Jan 10 18 Comments

( hypothetic question to understand the tax implication of RSUs ) Suppose I receive 20 RSU in Jan with a price of $100. After taxing, I receive 12 RSU. Then I hold on to them after one year then sell them. The price then would be $120. Do I pay tax on the capital gain of the 12 RSU ( which is $20 x 12) or on the whole 20 RSUs? Thx

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TOP 18 Comments
  • Fitbit Wished
    U pay income tax for the 20 RSU at $100. U then pay long term capital gains tax for the $20 x 12 gain
    Jan 10 0
  • Homeaway ppMg64
    You were awarded 20 RSUs. Let’s say they vest and you get 15 RSUs after paying for tax by selling the 5 stocks. At the time of vesting, the stock price was 100 bucks. So far you don’t owe any tax.

    Now you decide to sell these 15 stocks. The price at the time of selling is 120 bucks. The capital gains here is 15 * 20 bucks since you already paid taxes by selling 5 stock when they vested.

    So you need to pay tax on 300 bucks which is over and above the tax you have already paid. If you decide to sell your stocks within an year of vesting, it’s considered short term gains and are taxed at 30%. Which will be 300 * .3 or 90 bucks.

    If you sold these stocks after an year of vesting, these are considered as long term gains so you would be taxed at 15% or 300 * .15 or 45 bucks.
    Jan 10 6
  • NEXON M Rootini
    You only pay tax on the gains from the new basis established when you receive those 12 RSU. Meaning you’re only taxed on: 12 RSU * $20 price appreciation * cap gains rate
    Jan 10 0
  • Square
    Yeêp

    Square

    PRE
    Facebook, Google
    Yeêpmore
    Capital gains on $20 for each
    Jan 10 2
    • Facebook aKHq74
      OP
      For each of the 12 or each of the 20? ( technically since I have to return 8 to cover my tax at the vesting, I would not be owning the whole 20).
      Jan 10
    • Facebook / Eng >>
      Each of the 12
      Jan 10
  • New DvVM00
    12 obviously. however this is an idiot question. never hold RSUs. you paid the tax, sell them all.

    if you really want to own the stock, buy it again using your brokerage account.
    Jan 11 1
    • Facebook Copacabana
      What would that accomplish?
      Jan 11
  • Microsoft SunRsrsHyd
    That’s why it is better to sell RSUs as they vest
    Jan 11 0
  • Expedia / Eng
    InTheDNA

    Expedia Eng

    PRE
    Microsoft
    InTheDNAmore
    RSU awards are again source of income. So you pay tax when RSUs get vested. Usually, tax is deducted at source.
    Then, when you sell them, you pay tax on capital gains. And this tax will be on the actual profit you make by selling the RSUs.
    Country may have different rules on long term capital gains though.
    Say, you are sellling after holding for n years
    Jan 10 0
  • Google eXNB63
    After 1 year, fb will probably be 50 😂
    Jan 10 0
  • LinkedIn faxman
    Capital gains on 12 RSUs only, which is whatever you are left with after taxes at vesting time.
    Jan 10 0

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