laety

I guess my point was that its "unfair" that they are taxing us on something we havent actually cashed yet. I get that we didnt pay for anything and that they view it as being ours but they should wait that you cash them in and then tax you on what you got.. but thats my view anyway.. for the moment for me its "unfair" because we got taxed on a $5 value and they are down under $3 so it would be a huge loss..

nun

What happens will depend on your immigrations status and net worth. If you are not a permanent US resident and leave the country and then sell your shares there will be no US capital gains tax due as non-resident aliens do not pay US capital gains on sales of stock. You will have to comply with capital gains tax rules where you are currently living though.

laety

that makes sense! thank you

Jscl

I know it feels unfair, but overall you'd have got a good deal on those shares, and you never know soon they might be up! And if they stay down the loss will reduce your taxable income when you do sell them.

There are other things they give you that feel free until you see your next pay slip. My friend won an award for being the top person in sales (or something) and it was five days in Hawaii. Great eh? Then her next paycheck had it included as taxable income valued at something like $2000 and she had to pay about $400 in taxes on it!

At least with stocks you'll get cash out of them at some point!

laety

I laughed reading your post but I find this terrible!!
I know overall we are lucky to even have them, I guess I just hate taxes ahah.. Like I said its a good job we are not desperate, we will just leave them in this account and wait patiently that they at least get back to a decent price..

nun

This is the gamble you take when you get part of your compensation is stock. When company gives the stock to the employee it has to be included as income. If the stock price then goes down, well that's bad luck......startup companies sometimes pay in stock as it reduces the salary bill and kicks it down the road a bit. If the company is successful it's great, but if the company fails you are left with not much in actual cash salary and a lot of worthless stock.

The other option is to give an employee stock options. There you get the option to buy company shares at a discounted price and hopefully then sell then for a gain. In that case there is no income tax because you use your own money to buy the shares, but you obviously pay capital gains tax.