Hi ,
I apologize in advance if this question has already been answered . I searched for the possible answer to my question , but could not find it . I was awarded 100 shares ( rsu ) of XYZ , they vested on 05/05/2008 and
40 of them were sold right away to cover the taxes . I was left with 60 XYZ wich I did not sell. This income was included in my W2 form .My question is , do I need to report/file anything on my tax return this year ?
Thanks and your answer is appreciated
sndobo
Based on your fact statement, I will assume that the company plan for restricted stock units (RSU) required the issuance of stock on the date of vesting. You sold 40 shares in order to obtain the cash to pay taxes on the amount added to your W-2 as wages.
You sold a capital asset and you have to report the sale of 40 shares on Form 1040 Schedule D. It is a short term sale. Your proceeds are what you received for the 40 shares. Your cost basis is the amount of income added to your W-2 for those 40 shares. Usually the sale uses the same FMV as was used to generate your compensation and your Schedule D would not show any gain (cots of
40 shares equals the proceeds from selling those 40 shares). In fact, it might show a slight loss due to some fees or commissions you had to pay.It is possible that the amount of compensation added to your W-2 used a slightly different FMV than the price you sold at. E.g., this could happen if the plan called for the compensation to be based on the closing price at the day before. You would have to ask this question to whomever handled the transaction. You should have received some paperwork that explained this.
Alan
thank you very much for your detailed explanation !
sndobo
I received the following e-mail from another person using poor etiquette and not posting it to the newsgroup:
Question:
I am in this exact same situation, EXCEPT, if I were given Restricted Stock instead of Restricted Stock Units, would your answer be different?
Answer: No. But for the future, issuance of restricted stock allows you to make a Section 83(b) election within 30 days of grant. This is not available to employees who receive RSUs.
To learn about the 83(b) election see:
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