Becoming unemployed to reduce tax on IPO RSU vest

Amazon
hsushdhwhe

Go to company page Amazon

hsushdhwhe
Feb 6 44 Comments

My employer will IPO next year and my RSUs will be worth around 2 million USD at that point.

Since the taxation rate is based in my marginal tax rate, can I become unemployed that year to greatly reduce my tax burden on my RSUs?

Thanks a lot!

#taxes #ipo #google #coinbase #startup #Facebook

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TOP 44 Comments
  • Google / Eng
    JimKerrig

    Go to company page Google Eng

    PRE
    Google
    JimKerrig
    Hum i don’t think you understand how taxes work…
    Feb 6 15
  • Adobe
    hdydbdb

    Go to company page Adobe

    hdydbdb
    First world problems
    Feb 6 1
  • Amazon
    si29xqf

    Go to company page Amazon

    si29xqf
    There is no such thing as lowering your bracket. You pay incremental tax. You pay %10 of the first 10k you make, then 12% on the subsequent 30k you make.
    Feb 6 0
  • Apple
    TrjD37

    Go to company page Apple

    TrjD37
    1. Your only savings will be your marginal tax rate * your salary. It won’t save on the RSU tax rate and the money is large enough your marginal rate won’t change.

    2. Make sure to buy PUTs to hedge the time from liquidity event -> Sell (normally you have to wait 6 months post IPO to be allowed to sell)
    Feb 6 4
    • New
      •|

      New

      •|
      2. is not allowed. i don’t know if it will land you in jail or just have your rsu stripped from you
      Feb 6
    • New
      UdnH18

      New

      UdnH18
      You can hedge the whole market going down, but yes generally you are prohibited on taking short or short-like positions on your own employer.
      Feb 6
  • New
    UdnH18

    New

    UdnH18
    Get help.
    Feb 6 1