RSU (Restricted Stock Units) & Entrepreneurs Relief


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I invested 35k into a business in 2010, I worked in the business taking low wages to get the business up and invested profits to grow the business.

In return, I was allocated shares in lieu of the service contract to offset the low salary, the shares were fully vested on the date of issuance. These I understand are RSU, the value at the times was higher then what they were when I sold my shares.

I sold the majority of my shares in November 2019, the valuation was much lower than the valuation various points when the shares/RSU was issued to me, how would the tax be calculated now? say the valuation was double when they were issued to me but when I sold my shares, they were worth half.

Is there a way to offset the tax? how would Entrepreneurs relief work with this?
 
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Dec 5, 2020
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The RSUs should have been taxable to you when issued/vested, as taxable compensation. They are now treated as regular stock, subject to capital gain/loss. You'll need to figure out the value of the RSUs when issued/vested (what was the strike price of the shares on issuance date?), and that will be your cost basis.

Say you sold the shares in November 2019 for $50/share, but the strike price of the RSUs was $100/share when vested, then you have a $50/share capital loss to report.

Be aware, that by the date of your post, 2019 individual tax returns would be considered filed late (even if extended), on this hypothetical November 2019 sale of shares.
 

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