Proper way to record RSUs

Jason Ahrens jason at cougarcorp.net
Thu May 10 12:31:36 EDT 2007


So, I think I got this figured out... Does this sound reasonable?

1) RSU grant does nothing. They arn't "mine" yet and have no value to
me, so there  is no record of them.
2) When the RSU's 'lapse' there is a selloff initiated on my behalf for
taxes. This would come right from an 'income' account into a
'withholding tax - rsu' account.
3) The other RSUs go into an investment stock account "investment - Stock"
4) Sales of this stock happen as normal.

I'm still unclear on the tax implications. If I sell off the shares at
that point, they're subject to capital gains but I'm not sure on what
amount (the value at grant or the value at lapse?)

This sounds reasonable... Am I on track?

Jason

Jason Ahrens wrote:
> I didn't find anything about this in the Concept guide or the Wiki. I
> imagine it is somewhat similar to 8.7 Selling Shares but I'm not
> entirely sure.
>
> The way I understand an RSU is the following:
>
> 1) Company grants me X RSUs (we'll use 100 for simplicities sake). They
> are reserved at grant time, I don't have access.
> 2) At some point in the future, the RSUs lapse. At this point two things
> happen:
>     2.a) Y percentage (say 5%) is sold for tax purposes
>     2.b) The other 95% go into my account as stock for said company.
> They are not fully mine.
> 3) At some point further in the future, I decide I want to sell some or
> all of these stock. These are not subject to capital gains taxes as well.
>
> So there are a few points where it looks like numbers need to be recorded.
>
> 1) Optional. These are not mine yet, and can be taken away and I never
> see a peny. I would lean to not recording these except for
> record-keeping. At this point, they have 0 value to me.
>
> 2a) Some percentage is sold for taxes. There's a chance I get some of
> this back on my tax return, or that I owe more, so somehow this has to
> go to a tax account/expense.
> 2b) The remainder goes into an Investment account for Stock of the
> appropriate type. This much I can figure out :)
> For both 2a and 2b, what is the source of the cash to fund these
> transactions. I'm guessing some kind of Income...
>
> 3) At sale time, I get the full value as cash. Is there anything to
> record here for the capital gain requirements, or do I just hold a
> certain percentage aside (and how much is good) for tax time?
>
> Given that IANAA, am I close? Can someone help me fill in the blanks?
>
> Thanks
>
> Jason
>   



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