The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: jeromedawg on February 26, 2016, 01:23:04 PM
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Hey guys,
I had an RSU issued back in May '15 per my ESPP that has lost value per its cost basis since then. I'll be making small gains if I sell my ESPPs though. I was hoping to sell everything but was wondering what implications there are selling RSUs at a loss. Can this still be written off as a loss even though the RSUs were given by the company? Considering I'll be making gains, overall, should I not even worry about this and just proceed with selling off all ESPPs and RSUs? I have no interest in holding my position in this company long-term.
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Agh nevermind. I realized I actually did sell the RSUs a while ago - I likely did this because at the time the stock price was above what the cost basis was, and I didn't want to risk the value going under so I just sold off.
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Your taxable amount all depends on whether you received the RSU's as a 'gift' / 'bonus', or you 'paid' for the shares. Cost Basis is the key.
If the company issued the RSU as a bonus, and you paid nothing ($0) for the shares, then the cost to you was $0 regardless of the share price when the RSU was issued. In that case, even though the share price is lower today than when originally issued, since the cost was $0, you would have a taxable profit. (a lower profit than the original value, but still a profit)
If however you purchased these shares via WITHHOLDING (with funds from your paycheck) then your cost basis would be whatever the withholding amount was.
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Your taxable amount all depends on whether you received the RSU's as a 'gift' / 'bonus', or you 'paid' for the shares. Cost Basis is the key.
If the company issued the RSU as a bonus, and you paid nothing ($0) for the shares, then the cost to you was $0 regardless of the share price when the RSU was issued. In that case, even though the share price is lower today than when originally issued, since the cost was $0, you would have a taxable profit. (a lower profit than the original value, but still a profit)
If however you purchased these shares via WITHHOLDING (with funds from your paycheck) then your cost basis would be whatever the withholding amount was.
This is not right. When RSUs vest, the value is taxable income to you and that price becomes your basis. When you later sell those shares, the taxable gain/loss is calculated off the vesting price, not zero.