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Time-based RSUs vest according to a predetermined schedule, usually tied to your length of service. Conversely, performance-based RSUs depend on meeting specific company performance targets, adding a dynamic element to your compensation. Understanding these differences can help you make informed decisions about your stock options. Using the restricted stock between formula may assist you in calculating the potential value of each type.
Discovering Double Taxation on RSUs Using Form 1099-B Form 1099-B has been prepared per the IRS reporting requirements and is correct. And, because you didn't pay anything for these shares when they were granted to you through the years, it makes sense to you that the cost basis shows $0 for all the shares.
The per share cost basis of your RSU's in any lot is the compensation created by the vesting (which is reported on your W-2) divided by the GROSS number of shares you received in that lot.
If you have RSUs the amount should be shown in box 14 of your W-2 copy. This amount should also be included in the wages (box 1) of your W-2. Box 14 is used by employers to list various items and there is not a standard list of codes, you can use the options for "Other Not Listed Here" in place of RSU Gain.
Income in the form of RSUs will typically be listed on the taxpayer's W-2 in the ?Other? category (Box 14). Taxpayers will simply translate the figure listed in Box 14 to their federal tax return and, if applicable, state tax return(s).
Broadly speaking, the value of an RSU is a product of the following inputs: The stock price at the Valuation Date; The expected volatility of the stock price through the vesting period; The taxes payable upon vesting; The likelihood of the RSUs vesting; and. The time value of money.