RSUs -- just checking I am thinking about this correctly

[Fru-Gal]

So I have made it, despite my crazy boss, to my first tranche of RSUs!!!! It vests tomorrow. Tax election is net shares. <-- is this best?

I think we are in the 24% tax bracket.

I will do a calculation of how much company stock I already have as a percentage of investments. I also do ESPP. I have sold some of that after holding for a year, but also kept some, and it's done well (not Tesla-level insane, just reasonable appreciation).

Company stock is at an ATH with room to grow/bullish indicators. I am thinking of holding for a year for LTCG. Or should I sell some right away?

I know the thinking that it's a concentration risk + an emotional risk since I know/work at the company.

Argh, math & taxes.

[ixtap]

For RSUs, sell now for minimal taxes. You are being taxed in the vesting amount whether you sell or hold and if you sell immediately, there isn't much room for growth. Then you can diversify and leave that sit for years and years.

Many of us choose to do the same with ESPP, even though you are paying regular income taxes on the discount. Bird in hand and all that.

[seattlecyclone]

Right, no need to hold the shares a year for long-term gains. If you sell immediately the gain is basically zero, so the higher tax rate on that basically-zero gain isn't something to concern yourself about. Instead decide how much of this stock you would own if you weren't paid in stock, and sell all but that much.

[Fru-Gal]

Ooohhhhh I get it! I didn’t understand the sell-right-away argument until now. Thank you both so much!

[ender]

Public RSUs are basically the same as cash as far as tax purposes go based on the value at vest.

[AccidentialMustache]

RSUs become a reason to stay when the stock price has some crazy appreciation vs the price at time of grant. You're gonna get taxed on it either way, but if you had grant of say 10,000 shares (@$10/share) vesting over 4 years with a 1 year cliff -- an extra 25k/yr is nice, but not huge (... for tech). If your company's share price suddenly goes up to $80/share it isn't "nice" it is "fat sacks of cash."

The flip side of that is after you ride out that grant, the next one is likely to be tiny, because most companies grant based on a target $ amount.