Personal Investments • Why is my employer using this new approach for selling RSU shares to cover taxes?

I get RSUs from my employer. In the past when shares vested, at the same time the shares were deposited a portion of them would be sold to cover taxes. The sales price for this transaction was always the same as the value of the shares when deposited (sales price same as per share cost basis), so there was no taxable transaction and nothing for the 1099-B. Only the sale of the remaining deposited shares resulted in a taxable transaction.

Now my employer is doing something much more complicated. On the vesting date the shares are all deposited (none sold to cover taxes), but I cannot see or do anything with the shares initially. Then for each of the next 5 days there is a transaction to sell some small number of shares to cover 1/5th of the taxes (and make a small number of shares available for me to sell). So rather than one sales transaction to cover taxes (done at the same time as deposit and at the same price), there are now 5, each done at a different price. Not surprisingly my employer says that each of these transactions will generate a 1099-B entry.

Any idea why my employer is using this new method of selling to cover taxes? It seems unnecessarily complicated and generates more paperwork at tax time.

Statistics: Posted by olang — Wed Sep 18, 2024 10:55 am — Replies 11 — Views 420

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