My employer will be giving us RSU, I’m trying to figure out how exactly it works and if it’s something that I can just cash out?
In: Other
Your employer gives you stock, but it’s restricted. You might have to wait for it to vest before you can actually sell it.
When it vests, it’s a taxable event. You may have the option to ‘sell to cover’ where some of the stock is immediately sold to cover the necessary witholding (note – this might be more or less than you owe come tax season).
Once the stock is vested, it’s yours and you can do as you please. You can hold onto it and hope it increases in value or you can sell it immediately.
If it increases in value, you will owe additional capital gains tax (short or long term depending on how long you hold it from the vesting date).
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