Hello DG, great question! RSUs are a wonderful way to build equity!
In regards to the taxation of RSUs, they are taxed once the shares have been "received" (vested). Prior to vesting, there are no tax consequences. Once you have vested and received the shares, you are taxed as ordinary income on your W-2, which becomes your basis in the shares. You have compensation income subject to federal and employment tax (Social Security and Medicare) and any state and local tax. Once you sell the shares, you have a capital gain/loss recognition.
For example, let's say that you have been granted 1,000 shares that have been vested. The market value of the shares are $10 per share, so you have a taxable event of $10,000 that will show up on your W-2, taxed as if it is normal compensation (subject to income taxes and Social Security/Medicare taxes & any state related taxes). If you turn around and sell the shares the following day for $12 per share, your total proceeds will be $12,000. Your gain will be the proceeds less the basis, $2,000 ($12,000 proceeds less your basis of $10,000 that you were taxed on at the time of vesting).
I hope this answers your questions!
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