My client sold several RSU and ESPP options in 2021. She did not work for the company in 2021 and did not receive a W-2. How do I enter the ordinary income part of these transactions on line 7 in Lacerte?
The sale in 2021 doesn't not make it the W2 event. The vesting is the date of valuation. The date of the vesting and the sale don't have to be the same. Do you know when this was vested?
I like, for instance:
https://www.investopedia.com/terms/r/restricted-stock-unit.asp
https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp
RSUs are treated differently than other forms of stock options when it comes to how they are taxed. Unlike these other plans, the entire value of an employee's vested stock is counted as ordinary income in the same year of vesting.
In order to declare the amount, an employee must subtract the original purchase of the stock or its exercise price from the FMV on the date it becomes fully vested. This difference is then declared as ordinary income by the taxpayer. If the stock is sold at a later date (and not on the exercise date), the difference between the sale price and FMV is declared as either a capital gain or loss on the date of vesting.
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