How do I sell my restricted stock?
How do I sell my restricted stock?
How to Sell Restricted Stock
- Fulfill the SEC holding period requirements. From the date the shares are fully paid for, you must hold them at least six months.
- Comply with federal reporting requirements.
- Check trading volume.
- Remove the stock legend.
- Conduct an ordinary brokerage transaction.
- File required notices with the SEC.
What is a potential problem with including restricted stock?
Restricted Stock Bonus/Purchase Plans The disadvantage of a restricted stock bonus/purchase plan is that the employee has income but no cash with which to pay tax (of course, the Company can bonus cash to employee to cover the tax).
What is the difference between common stock and restricted stock?
Restricted stock is given by a corporation, while common stock can be bought and sold at any time. This makes the recipient of the stock liable for income-tax consequences immediately but establishes a cost basis.
What is the difference between restricted and unrestricted stock?
Restricted stocks have particular conditions that must be fulfilled before they can be transferred or sold, whereas unrestricted stocks have no such conditions. However, restricted stocks may be sold privately at any time, though such transactions are strictly regulated.
Do you get dividends on restricted stock?
RSUs do not offer voting rights until actual shares are issued at vesting. No Dividends. RSUs cannot pay dividends, because no actual shares are used (employers can pay cash dividend equivalents if they choose).
What happens to restricted stock when I leave the company?
Generally, leaving the company before the vesting date of restricted stock or RSUs causes the forfeiture of shares that have not vested. Additionally, with certain types of termination (e.g. disability or retirement), your stock plan may continue the vesting and even accelerate it.
How do you report restricted stock on taxes?
When you receive an RSU, you don’t have any immediate tax liability. You only have to pay taxes when your RSU vests and you receive an actual payout of stock shares. At that point, you have to report income based on the fair market value of the stock.
Do restricted stock units have a cost basis?
In fact, the cost basis and RSU rules are incredibly straightforward: it’s the price the shares cost for normal market buyers the day they vested into your name. Before you file, double-check that the income from your vested RSUs reported on your W2 matches the cost basis on your Form 1099-B.
How do I calculate cost basis for restricted stock?
Your cost basis is the amount your employer included on your W-2, which is the closing price on the vesting date times the number of shares vested. In this example, you will show a short-term loss of $11 on your tax return because of the brokerage commission and the SEC fee.
What is restricted stock offset?
Therefore you need an equal and opposite tax credit in the earnings column, and that is what we apparently call the RSU Tax Offset . Most likely income taxes were withheld in the tax section in an amount equal to that offset amount and only the net RSUs after withholding are listed under the RSU line.
