Hi, I have a number of stocks provided by my employer that have vested and wanted to ask how others in this situation record it in sharesight?
As the shares were given to me, the purchase price for me is $0. However, since there is no option to put the shares as $0 value, I’ve just been giving it a $0.01 value as a workaround.
Perhaps I should just leave the purchase price as the price of the stock on the day of the vest?
Any advice on others who are tracking their vested stock?
Thanks!
Hi Jeesinv, I read through the blog but still not clear. For shares that are vested, how do I set the purchase price of those shares? Is that the price of the shares on the vest date, or should I set it as $0? I did not buy the shares so there was no cost to me.
thanks for the awesome information.
It depends on how you have received the stock options from your employer.
If it is given as RSUs then on the day of vesting, you would incur the tax liability. The value of the RSUs are calculated on the market price of the day of vesting. This amount is treated as a taxable income for you so when you file the ATO return it would fall under the ESPP category as an income.
Your employer (assuming the US employer) will sell some of the vested RSUs on the market to pay the tax to the local tax authority as you have received a taxable income from your employer as the stocks are given for free. They will report this income and the tax deduction to the ATO.
What does it mean is, the rest of the vested RSUs (i.e, the total vested RSUs - vested RSUs sold by your employer) would need to be entered in Sharesight.
The purchase price is set to the closing price of the stock for that day.
e.g., If you have 100 RSUs vested and your employer has sold 20 RSUs to pay the tax burden. Let’s assume that the stock price closes at US$50 on that day then you enter as purchasing 80 stocks (100 - 20) at the cost base of US$50 per stock.
If the employee stock options are provided either as ISO or NQSO options then the tax liability becomes when we exercise the vested stock options.
Let’s assume that the exercise price is US$5 and at the time of exercising the vested options the market price is US$50 (or the FMV if the stock is not yet IPOed). Also assume that you have exercised 100 vested options. Then you would enter this in Sharesight as purchasing 100 stocks at the price of US$50. In your tax return you will declare that you have received an income from your employer which is 100 * (50 - 5)=US$4500. The difference between the Market Price (or FMV) and the exercise price is treated as an income provided by the employer for the taxation purpose, hence your cost base is adjusted to the Market Price (or FMV).
I’m in this boat and after going through all the ATO docs this is what I have figured out for the employee stock options.
Hope it clears things out for you and many of the folks in the same situation.