When am I liable for taxes? I know that I am not liable for taxes on the date of grant.
I have been granted an allotment of restricted stock with a 4 year vesting schedule by a publicly traded US corporation of which I am an employee.
- 100 shares vesting at 25% per year (0% at issue, 100% vested 4 years after grant). Let's say this was received May 1, 2014.
Which of the below, if any, is correct?
If the share price was $PRICE on May 1, 2015, am I expected to pay taxes on constructive receipt of 25 shares (the amount of shares vested at that time) @ $PRICE, or $25 * PRICE of income that will be taxed, per year until fully vested?
Does the doctrine of constructive receipt only apply once the stock is 100% vested?
Edit; my understanding to this point is that (1.) is true but I want to make sure.
Edit2; this question is not fully answered in "Tax implications of restricted stock units" because it does not address at what point in the vesting schedule that recognition of income occurs.
The closest thing I found was "RSU are taxed when vested, based on their value at that point, as salary." as an answer in that question but that does not clearly state whether that is full tax on full vesting or partial tax on partial vestment.