Tax question for Lyft folks

Uber
Tแป•ng

Go to company page Uber

Tแป•ng
Apr 1, 2019 25 Comments

Congrats on your IPO. ๐ŸŽ‰ This must be a very exciting time for you. Itโ€™s an exciting time for everyone in this space. ๐Ÿ‘

Are any of you concerned that if LYFT continues to dip before the end of the lock-up period, then you might have a tax bill in excess of your personal proceeds from the IPO? Is your HR/leadership doing anything to calm such concerns?

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TOP 25 Comments
  • Lyft
    jzzz

    Go to company page Lyft

    jzzz
    There is a default withholding percentage which is ~12% lower than actual for most of us. Not really concerned about the tax bill - the price would have to drop a lot
    Apr 1, 2019 7
  • Oath
    OPnd70

    Go to company page Oath

    OPnd70
    I canโ€™t tell if youโ€™re being facetious or oblivious to the inevitable.
    Apr 1, 2019 6
  • Apple
    parking

    Go to company page Apple

    parking
    Isnt the taxation done at time of when you can actually sell shares. If they sell the next day they will have no extra tax impact
    Apr 1, 2019 4
    • Airbnb
      weasel

      Go to company page Airbnb

      weasel
      Holy fuck you guys are clueless. Tax happens after lockup, not at IPO. Source: I've gone through this twice. Tax code explicitly says when the stock is released to you, which happens after BOTH triggers in double trigger vesting.
      Apr 4, 2019
    • You are wrong and should know better. Under section 83 of the tax code they are considered vested at an IPO or change of control unless there is a โ€œsubstantial risk of forfeitureโ€ which is not true of a lock up period. You have been filing your taxes incorrectly.

      You also referred to double triggers: the first trigger is time, the second trigger is a liquidity event for the company (not for you). There is no third trigger for end of lock up.

      Please read Treas. Reg. section 1.83-3(b).

      Your argument is essentially equivalent to claiming that if you work for a public company and have RSUโ€™s vest but are outside a trading window, you donโ€™t have a tax burden until you can trade. This is obviously untrue as well. Personal liquidity of the shares is irrelevant.
      Apr 4, 2019
  • Uber
    Ubereats

    Go to company page Uber

    Ubereats
    Are employees taxed at $72(ipo price) or ~$85(opening price on ipo day)?
    Apr 2, 2019 2
  • Curious too. Do they sell to cover taxes right away after IPO? What is the withholding percentage? 25% or something custom?
    Apr 1, 2019 0