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13

This is several questions wrapped together: How can I diplomatically see the company's financial information? How strong a claim does a stockholder or warrantholder have to see the company's financials? What information do I need to know about the company financials before deciding to buy in? I'll start with the easier second question (which is quasi ...


6

What happened is that they do not track (and report) your original cost basis for 1099-B purposes. That is because it is an RSU. Instead, they just reported gross proceeds ($5200) and $0 for everything else. On your Schedule D you adjust the basis to the correct one, and as a comment you add that it was reported on W2 of the previous year. You then report ...


4

I'm a retired stockbroker/Registered Investment Advisor. My initial discussions with prospects never had a fee. Restricted stock is unsaleable without specific permission from the issuing company, and typically involves time specifc periods when stock can be sold and/or amounts of stock that can be sold. Not for DIY. Financial planners may be able to assist ...


4

In addition to the income tax on capital gains, you may also have to pay Medicare tax on investment income. The Medicare tax has two rates, 2.9% and 3.8%. Investment income is taxed at the 3.8% rate if taxed. You say that you are in the middle of the 33% bracket. That suggests that you are above the threshold where you have to pay the Medicare tax on ...


4

The reason for this is that when the RSUs vest, they become income to you, and your employer is obliged to operate PAYE on that income, withholding some of it to pay tax to HMRC. The income is calculated based on the value of the shares at the time they vest. The two options are essentially that they immediately sell some of the shares to generate enough ...


4

You may have run into one of the more devious issues of the tax code: "phase outs". Certain deductions (state/real estate taxes, dependents, overall deductions, AMT deduction) are are reduced or capped as your income increases. Although intended to penalize "high" incomes, these typically hit middle incomes the hardest. For example, the AMT has three tax ...


4

Also from the page you refer to is: At newly public companies, grants made before the initial public offering (IPO) may also require a liquidity event (i.e., the IPO itself) to occur before the shares vest. Once the liquidity event has occurred, the shares vest 180 days later. So, combined with the quote you gave, unless the terms of the RSU specify ...


4

What financial consideration would a company have when changing from Plan A to Plan B? Employees get access to some of the RSUs sooner, but the overall vesting period increases, so it's a trade-off. The company has cash outlays sooner, but spread them out over a longer period. From an expense standpoint, the expense is recognized over the vesting period, ...


3

You wouldn't fill out a 1099, your employer would or possibly whoever manages the stock account. The 1099-B imported from E-Trade says I had a transaction with sell price ~$4,500. Yes. You sold ~$4500 of stock to pay income taxes. Both the cost basis and the sale price would probably be ~$4500, so no capital gain. This is because you received and ...


3

For RSUs, the cost basis should be the fair market value (FMV) of the shares on the day they vest. This should be listed on your 1099-B from E-Trade, but perhaps not. If it's missing or $0, you'll need to adjust your basis to avoid being double taxed. You should have some kind of records to determine the FMV, for example payslips or you should be able to ...


3

No, you're not missing anything. RSUs are pretty simple when it comes to taxes. They are taxed as compensation at fair market value when they vest, basically equivalent to the company giving you a cash bonus and then using it to buy company stock. The fair market value at vesting then becomes your cost basis. Assuming the value has increased since vesting, ...


3

RSUs are not "essentially cash". "R" in the RSU stands for restricted. These awards have strings attached, and as long as the strings are attached - you don't really own the money. As such, most banks do not include RSUs in the income considerations. Some do, especially if they have a specific agreement with your employer (check your HR/benefits coordinator)...


3

83(b) election requires you to pay the current taxes on the discount value. If the discount value is 0 - the taxes are also 0. Question arises - why would someone pay FMV for restricted stocks? That doesn't make sense. I would argue, as a devil's advocate, that the FMV is not really fair market value, since the restriction must have reduced the price you ...


3

Tax wise, you simply report the income from your units like any other shareholder or LLC member it's just at some point the income will go away. And go away it will, unless you demand your units be made permanent while you remain with the LLC. Once your employment ends the LLC has no reason to make your units permanent. I wouldn't get hung up about the ...


2

You decide on a cost bases attribution yourself, per transaction (except for averaging for mutual funds, which if I remember correctly applies to all the positions). It is not a decision your broker makes. Broker only needs to know what you've decided to report it to the IRS on 1099, but if the broker reported wrong basis (because you didn't update your ...


2

There's no best strategy. Options are just pieces of paper, and if the stock price goes below the strike price - they're worthless. Stocks are actual ownership share, whatever the price is - that's what they're worth. So unless you expect the company stock prices to sky-rocket soon, RSU will probably provide better value. You need to do some math and ...


2

These amounts should appear in the W2 as imported by Turbo Tax. You should be able to go to the "Income" section, and check the W2 as imported there. It should match. If it doesn't - correct it. ESPP-related entry on box 14 in W2 doesn't appear on your 1040 as is, instead it affects the calculations on your Schedule D. It should appear as adjustment to ...


2

Is selling Vested RSU is the same as selling a regular stock? Yes. Your basis (to calculate the gain) is what you've been taxed on when the RSUs vested. Check your payslips/W2 for that period, and the employer should probably have sent you detailed information about that. I'm not a US citizen, my account is in ETrade and my stocks are of a US company, ...


2

Does this make sense? I'm concerned that by buying shares with post tax income, I'll have ended up being taxed twice or have increased my taxable income. ... The company will then re-reimburse me for the difference in stock price between the vesting and the purchase share price. Sure. Assuming you received a 100-share RSU for shares worth $10, and your ...


2

I would ask your HR or benefits department to be certain, but here's how I read that without any specific knowledge of the situation: What is right to receive the RSU consideration? Company A was bought by Company B. You had unvested Restricted Stock Units in A, which is now gone. B is saying that you now have the right to receive consideration ...


2

Did I pay unnecessary taxes? Probably. You should have put in the value (price*shares) at the time of vesting as the cost basis - the difference between that and the price you sold it for is your additional gain/loss that you pay capital gains tax on. The actual value of the stock at vesting should have been taxed as regular income (which was paid at that ...


2

Is the Grant Date or the Vest Date used when determining the 12-month cutoff for long-term and short-term capital gains? You don't actually acquire the stock until it's vested, so that is the date and price used to determine your cost basis and short-term/long-term gain/loss. The grant date really has no tax bearing. If you held the stock (time between ...


2

Fidelity has a good explanation of Restricted Stock Awards: For grants that pay in actual shares, the employee’s tax holding period begins at the time of vesting, and the employee’s tax basis is equal to the amount paid for the stock plus the amount included as ordinary compensation income. Upon a later sale of the shares, assuming the employee holds the ...


2

There are phase-outs of several tax reductions that are based on AGI, so an increase in AGI can increase the tax on your other income in addition to the 36.8% or 18.8% tax on the investment income. Some of these include the personal exemptions and itemized deductions.


2

Yes, you will owe income tax to California. It doesn't matter if you quit your job prior to the IPO; your RSUs still came from a CA source, and they were granted and vested while you were/are a CA resident. The fact that the shares aren't delivered until N months post-IPO doesn't matter, either. That link you referenced describes the situation quite ...


2

The old vesting plan is unusual, the new vesting plan is much more common. I'd suspect that the company had an unusual vesting plan for some unusual reason and now that the company is getting more mature and "normal", the rationale for that unusual vesting plan has gone away. For example, consider an early company that's several years away from having a ...


2

After staring at the RSU Vesting check stub (aka an off-cycle payslip) and entering in the taxes paid information to my personal accounting software it occurs to me that this RSU Tax Offset may simply be an accounting trick. The trick here is to factor out taxes paid to the government into the actual line items that properly reflect the actual taxes paid, ...


2

Stock options are hard to value since there is a lot of risk associated with it. The amount of risk varies a lot with the specifics. They are worth less than the projected win and more than 0. The tricky part is: how to put a number against that? You want to look at Strike price vs current price Business plan, future outlook. Is there a market for this ? ...


2

For starters, is the RSU already transferrable? As for your questions in regards to the movement of the stock over time, results can vary. If the stock is stable, then yes, over its lifetime it should be positive and should have a relatively standard upward trend. However, with that being said, if your knowledge of financial markets is limited, you're better ...


1

Code V is explicitly for stock options, not vested RSUs. From the IRS: Code V—Income from the exercise of nonstatutory stock option(s). Show the spread (that is, the fair market value of stock over the exercise price of option(s) granted to your employee with respect to that stock) from your employee's (or former employee's) exercise of nonstatutory ...


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