Restricted Stock
Annotated diagram of Schedule DTax 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.
Restricted Stock

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.

Selected Articles

Taxes Advanced

Restricted Stock & RSUs: 10 Mistakes To Avoid On Your Tax Return This is premium content

Tax returns involving income from restricted stock and restricted stock units (RSUs) can be confusing. The potential for mistakes has been increased by recent changes in IRS reporting rules. This article explains errors to avoid when reporting stock compensation and stock sales.
Taxes Advanced

Get Cost Basis Right To Avoid Overpaying Tax On Stock Sales: Understand IRS Forms 1099-B And 8949 For Tax Returns This is premium content

UPDATES! The stock-sale information provided by brokers on IRS Form 1099-B has changed. Cost-basis reporting, both for your broker on Form 1099-B and for you on your tax return, is now more complex, confusing, and vulnerable to errors. This article explains the crucial facts you must know to avoid overpaying tax or attracting unwanted IRS attention.
Taxes Advanced

How To Report Sales Of Company Stock On Your Tax Return

Form 8949 and Sch. D diagrams! If you sold shares in 2020 that you acquired from equity compensation or an ESPP, you will need to report the sale on the federal tax return that you file in 2021. Learn here what you must know to avoid expensive mistakes and unwanted IRS attention. Our annotated diagrams of Form 8949 and Schedule D can help you make sense of the reporting rules.
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Restricted Stock Units

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

Restricted stock units (RSUs) are the most popular alternative to stock options, but they work very differently. Also, while grants of restricted stock and grants of RSUs are somewhat similar, they too differ in key ways, so it is important to understand RSUs in their own right. This article series explains the basic facts of RSUs, including vesting and tax treatment, that you must know to make the most of an RSU grant.
Basics

The Great Benefits Of Restricted Stock And Restricted Stock Units (RSUs)

Podcast included! Receiving a grant of restricted stock or restricted stock units (RSUs) is a reason to celebrate. This article explains the value to you.
Restricted Stock Units

VIDEO! Restricted Stock & RSUs (Part 1): Key Aspects To Know

Presented by the editor-in-chief of myStockOptions.com, this engaging video covers the fundamentals of restricted stock, restricted stock units (RSUs), and performance shares to help you make the most of these grants. This video covers key concepts, such as vesting schedules and understanding your grant's value. Running time: 4:37
This is simply a selection of the many articles in this section.
Use the navigation to the left to explore all of the categories in this section.

Selected FAQs

Taxes Advanced

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 all too easy to make costly tax-return errors that attract unwanted IRS attention. Learn how to prevent mistakes in the 2021 tax season...
Taxes Advanced

Form 8949 and Sch. D diagrams When I hold restricted stock after it vests and later have capital gains on the sale, will I get any credit for the income tax I paid at vesting? This is premium content

The vesting and the sale are separate transactions. First the stock's value at vesting is taxed, unless...
Taxes Advanced

Form 8949 and Sch. D diagrams In the tax-return reporting for restricted stock, do I need to report shares that I sold for taxes or that my company used for tax withholding? This is premium content

You should definitely report a sale for taxes at vesting if you received a 1099-B that shows the proceeds. The IRS will...
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Taxes

When and how is a grant of restricted stock or RSUs taxed?

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...
Taxes Advanced

What are some major issues to be aware of when reporting stock sales on my tax return? Why have these issues arisen?

Major changes have occurred in tax-return reporting in recent years, making accurate tax-return reporting more complex and difficult...
Basics

What are the top 10 questions I should ask about my grant of restricted stock or RSUs?

You should know the answers to the questions in this FAQ's checklist. Understanding the topics involved will help you make the most of your restricted stock/RSU grant and prevent costly mistakes...
Taxes Advanced

How have IRS Form 1099-B and cost-basis reporting changed for sales of stock acquired from my stock options, restricted stock, or ESPP? What do I need to do differently? This is premium content

If you sold shares during the calendar year, your brokerage firm will issue IRS Form 1099-B by mid-February of the following year. This is an important document that you must have to complete your tax return for the year of sale...
Taxes Advanced

What if the wrong cost basis is reported on my 1099-B? How do I report the right cost basis on Form 8949 of my tax return? This is premium content

From our interpretation of the forms and their instructions, myStockOptions.com recommends the following reporting steps to avoid overpaying taxes...
Basics

My restricted stock will vest soon. What must I do and decide? This is premium content

When vesting occurs and the restriction on the shares lapses, you have some choices but fewer than you would with stock options, which require decisions about exercise timing and method. Restricted stock and restricted stock units do not...
Basics

Can restricted stock and performance shares go underwater? This is premium content

Not in the way stock options can. Restricted stock is worth the full market value of the stock when it vests (or, with restricted stock units, when shares are delivered). It does not matter if...
Restricted Stock Units

What are restricted stock and restricted stock units (RSUs), and how do they differ? This is premium content

While restricted stock and RSUs are siblings, they have important differences, as explained by this FAQ, which includes a quick-reference table clearly presenting the comparison...
This is simply a selection of the many FAQs in this section.
Use the navigation to the left to explore all of the categories in this section.
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