Tom Davison
Thanks to the IRS, with restricted stock you have to make decisions immediately at grant. Learn the rules that accompany this increasingly popular type of equity compensation.
Bruce Brumberg and Kate Victory
Along with stock options, your company has awarded you restricted stock. Restricted stock grants carry their own requirements and tax rules, which can significantly differ from those of stock options.
Matt Simon
The taxation of RSUs generally resembles that of restricted stock but carries some important differences.
Tom Davison
Vesting is a crucial moment for making decisions about your restricted stock. This article series examines your alternatives. Part 1 discusses withholding.
Sandra Block
USA Today
Know how restricted stock and options differ, including in tax rules.
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The timing of taxation is different than that of stock options. You pay tax at the time the restrictions on the stock lapse. This occurs when...
Restricted stock withholding is similar to withholding for most other forms of supplemental compensation. You can have different choices for paying taxes, or your company may automatically...
Restricted stock results in ordinary income to you. This occurs either at the time...
Restricted stock units result in ordinary income to you. This occurs when...
This depends on how your stock plan defines fair market value (FMV). Some companies may use the closing price on the vesting day, which...
Federal income tax is imposed on the value of the shares at vesting (or at grant if you made a Section 83(b) election, which is unavailable for RSUs). Tax is generally withheld at the flat rate of...
Backup withholding is a form of tax withholding on income from stock sales, along with interest income, dividends, or other types of payments that are reported on Form 1099. Your brokerage firm is required to make backup withholding if you are...
In some ways they are similar. The tax treatment of restricted stock is the same for everyone. The reporting and withholding income is different. If you are an employee...
This tax term applies when rights to compensation are conditioned upon future performance of services or the occurrence of...
Not as you can with stock options. With stock options, tax consequences occur when...
Depending on the aggregate amount of supplemental income for the year, a two-tier rate applies. The withholding rate for supplemental wages that exceed $1 million in a calendar year is...
Many states, counties, and cities impose income tax on their residents. Those that do have income tax almost always...
Dividends that are earned on restricted stock are considered compensation income, which is reported on your W-2 (1099-MISC for nonemployees, such as directors). The dividends can be "qualified dividends" and thus taxed at a lower rate when...
For restricted stock, it begins on the day after vesting, unless...
The holding period for capital gains and the date of your sale, not the grant or vesting date of the restricted stock, are what matter. The tax on the capital gains is...
The standard option-for-option exchange is not taxable. When you exchange underwater options for restricted stock, the value of the shares...
While there are some general trends, the treatment of stock options, restricted stock, and other equity awards in divorce is far from similar in all states. In general, the outcome depends on four factors...
The basic principles that apply to options transferred in a divorce settlement also should apply to the transfer of restricted stock. This would allow...
Typically, all or a
pro rata portion of any restricted stock vests at death. The value of restricted stock that vests and is payable at your death will...
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Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
