RSU help
I read about not sitting on RSUs and selling them right when they vest. I know this now but I have quite a few shares from RSU vested in my account (all vested this year so considered short term). Should I sell right away or watch the stock and sell at a better price? I hvae ESPP too but sitting on for long term cap gains...thought RSUs were same. Sincerely, New to this money thing
Cash is King - unless it is Google Stocks! Looks like you donโt need the extra money: While auto sale is advantageous in certain instances, Google RSUs are very legit investment option as we all have got 15%+ return annually. This is phenomenal returns. Until you really need the money for spending, donโt sell it. Now, if you think long term, over 3-4 years, you will accumulate enough RSUs . At that stage it may not be right to be invested in just one stock. You can sell certain portion of that and diversify in other stocks or assets.
Is not advisable to invest too much in one company stock even if it is the company youโre working for. Rsu are taxed at the time of best. Even if you donโt sell it you still pay taxes in that year. That does not happen with Espp. If the tour rsu vest at say $10/share you are effectively paying taxes on that $10/share. If the value of the stock goes up you pay the remaining difference in profit while selling. If the value of the stock goes down you claim a loss and since you already paid more taxes at time of vesting you need to get money back from irs and track it that you had paid more in taxes in some earlier year. I feel it becomes very tricky if the losses are incurred.
Can someone explain me long term taxes on Espp? Is it one year holding once I get stocks or is it 2 years?
RSUs are taxed as income at vesting value. You can sell immediately to get that income in cash and then decide what to do with that cash as you would normally. Capital gains only applies if they go up in value after vesting.