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I have restricted stock from my employer. When determining wash sale rules, what is the appropriate date to use for when the stock is "acquired"? Is it the grant date or the vesting date? (and if you know the answer, could you please link to the relevant IRS documentation? I've looked at IRS Pub 550 and can't make heads or tails of it.)

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The vesting date. Look at publication 525, under stock options, where they talk about ESPP:

Your basis is equal to the option price at the time you exercised your option and acquired the stock. The timing and amount of pay period deductions do not affect your basis.

  • hmmm... that talks about basis, not wash sales... but it's a start. – Jason S Nov 13 '13 at 13:53
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For restricted stock, I think the vesting date meets the requirements of the second wash sale trigger from IRS Pub 550: Wash Sales:

Acquire substantially identical stock or securities in a fully taxable trade

I base this on these two quotes from IRS Pub 525: Restricted Property:

any income from the property, or the right to use the property, is included in your income as additional compensation in the year you receive the income or have the right to use the property.

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Until the property becomes substantially vested, it is owned by the person who makes the transfer to you, usually your employer.

So on the vest date:

  • The transfer is taxable

  • Ownership is transferred to you

That seems close enough to "a fully taxable trade" for me.

Maybe this changes if you pay the tax on the stock on the grant date. See Pub 525: Restricted Property: Choosing to include in income for year of transfer. Obviously, if this is important you should consult your tax advisor.

Technicalities aside, I don't think it passes the sniff test. You're getting salable shares when the restricted stock vests. If you're selling other shares at a loss within 30 days of the vesting date, that smells like a wash sale to me.

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