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Restricted Stock

Restricted stock, RSUs, and performance shares have become prominent forms of stock grant. Browse an overview of this section below, or explore the subtopics to the left.

In addition to the main areas about basic and advanced topics in all these types of grants, see the special subsections that are exclusively about restricted stock units and performance shares.

Test Your KnowledgeTest and improve your knowledge with our Restricted Stock & RSUs quiz and its study guide in the answer key.


Want to know more? Got a few minutes? Listen to our new podcast on restricted stock and restricted stock unit basics!

  Articles   FAQs  

Why You'll Learn To Like Restricted Stock Grants

Richard Friedman
Your company may no longer be using stock options. Instead, it may be granting restricted stock, restricted stock units, or performance shares. While these grants don't carry the same upside as stock options, they have benefits you will surely appreciate once you understand their special features.

Restricted Stock Units Made Simple (Part 1):
Understanding The Core Concepts

Matt Simon
NEW! Restricted stock units (RSUs) have become the most popular alternative to stock options. While RSUs share many of the same issues as restricted stock, there are differences, and it is important to understand the basics of RSUs in their own right.

Restricted Stock Units Made Simple (Part 2): Taxation This is premium content

Matt Simon
NEW! The taxation of RSUs generally resembles that of restricted stock but carries some important differences.

How Tax Rate Changes Impact Your Stock Grant Strategies (Part 2): Restricted Stock This is premium content

Stanley Trotta with Robert Gordon
With tax increases in mind, now may be a good time to re-evaluate your current financial-planning strategy. Should you take action with stock compensation now or wait until new rates apply? Part 2 looks at restricted stock and restricted stock units.

Restricted Stock: Tax, Financial, Estate, And Retirement Planning (Part 1) This is premium content

Richard Friedman
Understand financial planning for restricted stock and RSUs. Part 1 discusses the growing popularity of these grants, their special features, and the related tax planning.

Restricted Stock: Tax, Financial, Estate, And Retirement Planning (Part 2) This is premium content

Richard Friedman
Careful planning can help you maximize the value of restricted stock and RSUs by preparing you for decisions you must make. Part 2 covers complex issues in financial, estate, and retirement planning.

Restricted Stock Versus Stock Options: Making A Rational Choice (Part 1) This is premium content

Alan B. Ungar
In a growing trend, your company may let you choose between stock options and restricted stock. Which is better for you? Learn techniques to analyze your financial situation and goals so that you can make the right choice.

Restricted Stock Versus Stock Options: Making A Rational Choice (Part 2) This is premium content

Alan B. Ungar
As noted in Part 1, many companies are developing employee-choice programs that allow you to choose between stock options and restricted stock. Part 2 provides a method of analysis to help your decision-making.

Decisions At Grant With Restricted Stock (Part 1): Tax Fundamentals This is premium content

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.

Restricted Stock Taxation: What You Need To Know (Part 2) This is premium content

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.

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When my restricted stock vests, will I need to make estimated tax payments? This is premium content


At a minimum, when the restricted stock vests your company will withhold taxes at the required federal withholding rate for supplemental income (assuming you didn't make a 83(b) election to pay the taxes at grant instead). However, depending on your income, this minimum withholding may not be enough. If so, you will need to...

Are there any strategies for paying estimated taxes on income from stock options and restricted stock? This is premium content


Estimated-tax periods end on the last days of March, May, August, and December, with payments due by the 15th (or the next business day) of the following month. If you are paying estimated taxes, one strategy is that just after the start of an estimated-tax period you can...

My company is now granting restricted stock, and the current share price is much lower than I think it will be in a few years. Any tax-planning ideas? This is premium content


For restricted stock, you can make what the tax code calls a Section 83(b) election to be taxed immediately at grant instead of later at vesting, when your stock price, and thus your tax rate, may be much higher. However, before you make your decision, realize that...

My company's stock is now essentially worthless because of securities fraud by senior executives. Can I claim a casualty or theft loss on my tax return? This is premium content


A casualty or theft loss would allow you to deduct the lost amount against your ordinary income, subject to some limits. However, Treasury regulations and court rulings would probably stand in your way. Nevertheless, what you can do is...

NEW! Can the IRS seize stock options or restricted stock under a tax lien? This is premium content


The IRS can seize your stock options if it applies a federal tax lien to you for unpaid taxes. After seizing your stock options, the IRS can also...

UPDATED FOR 2010! What are the biggest mistakes with restricted stock or RSUs that I can make on my tax return, and how can I avoid them? This is premium content


It is easy to make mistakes that lead to paying more tax than you need to, or that may even prompt a review by the IRS. When the restricted stock vests, the full value of the shares at vesting is reported on your...

UPDATED! What is the difference between restricted stock and performance shares or units? This is premium content


Restricted stock shares are issued up front at grant, but you do not own them outright and cannot sell or transfer the shares until the time-based restrictions lapse. With standard restricted stock units the situation is basically similar, while with performance shares your company sets goals that must be met, such as...

Does this website's content on restricted stock also apply to restricted stock units (RSUs)?


Generally, yes, with two exceptions. First, with RSUs you cannot...

UPDATED! When I file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve stock grant income?


Stock compensation income can raise your income tax and make your tax return complex. The IRS has a form that lets you apply for an automatic six-month extension for the due date of your tax return (until mid-October). Mistakes include not paying taxes owed with...

UPDATED! What types of company goals are most commonly set for performance shares and units? What do surveys show about the performance metrics that companies use? This is premium content


Stock-based performance plans have targets that, when reached by the end of the measurement period, trigger vesting or payout according to the structure of the plan. Data from varoius surveys show that the most common metrics are...

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   Restricted Stock   
Basics   
Advanced   
Restricted Stock Units   
Performance Shares   
Taxes   
Taxes Advanced   
Section 83(b)   

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