Sunday, February 12, 2017

favorite excel amortization table example

Saturday, February 04, 2017

how long to hold RSUs and SPP

Hold SPP shares for at least two years after offer date and one year after purchase date to avoid a disqualifying disposition. 

Hold RSU shares for at least one year.

Phrasing above is fast/lose heuristic, not precise. here are more details for the SPP component.


Summary from link above (TODO: more details on the RSU section):

How much of the stock sale price is compensation and how much is capital gain?

That depends on whether your stock sale is a qualifying disposition or a disqualifying disposition.

Disqualifying disposition:

You sold the stock within two years after the offering date or one year or less from the exercise (purchase date).

  • In this case, your employer will report the bargain element as compensation on your Form W-2, so you will have to pay taxes on that amount as ordinary income.
  • The bargain element is the difference between the exercise price and the market price on the exercise date.
  • Any additional profit is considered capital gain (short-term or long-term depending on how long you held the shares) and should be reported on Schedule D.

Qualifying disposition:

You sold the stock at least two years after the offering (grant date) and at least one year after the exercise (purchase date).

  • If so, a portion of the profit (the “bargain element”) is considered compensation income (taxed at regular rates) on your Form 1040.
  • Any additional profit is considered long-term capital gain (which is be taxed at lower rates than compensation income) and should be reported on Schedule D, Capital Gains and Losses.