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Ten Financial-Planning Rules Everyone With Stock Options Needs To Know

By Michael Beriss

Managing stock options is one of the most complex financial-planning challenges you may face. The 10 guidelines in this article will help you get the most out of your option grants: setting goals, stock option valuation, exercise timing, job-loss considerations, understanding the taxation, and much more. See also our companion articles on planning rules for restricted stock, restricted stock units, and employee stock purchase plans.

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Q: Will I have to pay capital gains tax if I sell my RSU shares for less than they were worth when I got them?
A: In short, no, but you still need to report the sale on your tax return. Whenever you sell stock, whether at a loss or a gain, you are required to report the sale on your IRS Form 1040 tax return. Stock sales from equity awards, such as RSUs, present some complications in the...
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