How to enter RSU released which differs from vested amount?

Question

I am trying to track RSUs. I am not tracking granted amount because I only really care about the vested amount. However, the amount vested differs from the amount released, due to the taxes being witheld in the form of shares.

How do I factor for this in Quicken so that I see the reality of what happened (x shares vested -witheld taxes amount = released share balance?

mshiggins · Answer

@harry askenazi you asked:

Separately, I have an ESPP too. do you see a reason to keep these in a separate account from RSUs or do you recommend using 1 account for both?

It is generally better to match Quicken accounts to your real world accounts. I have both RSUs and ESPPs at Fidelity.  The RSUs and ESPPs are in the same Fidelity account and are in the same account in my Quicken. I have never encountered an issue with this set up.

harry askenazi · Answer

Thanks for the comprehensive response

When you say "the comprehensive accounting for all tyhis is to actually recognoize the shares granted" I think you mean the "shares vested". I am granted x shares at once but they vest over time. Then, the vested amount is reduced by the same day sale you mentioned, which results in "realized" or "issued" shares. Right? Or do you mean track the total granted, including those that haven't vested?

Regarding the simpler way, I don't think I even need to track the vested shares at $0, especially since I believe they vest and get distributed the same day. But maybe i'm thinking about this wrong

Separately, I have an ESPP too. do you see a reason to keep these in a separate account from RSUs or do you recommend using 1 account for both?

Tom Young · Answer

"I am trying to track RSUs. I am not tracking granted amount because I only really care about the vested amount. However, the amount vested differs from the amount released, due to the taxes being witheld in the form of shares.

'

What happens in these situations when you instruct your employer to do a "same day" sale to cover the employment taxes at vesting is that ALL the shares ARE issued TO YOU but the employer sells shares "for you" to cover the taxes, with you actually seeing the net after-sale number of shares showing up in your account, and the cash raised by the sale distributed by the employer to the varying taxing authorities.  These taxes will be included in your year-end W2.

Typically it all happens "behind the scenes" without you seeing those actions but generally that's how it plays out.

You probably will receive, sometime next year, a Form 1099-B for "your" sale of shares.  (Same day sales very frequently result in a small loss due to commissions and fees.)

So the comprehensive accounting for all this is to actually recognize the shares granted to you, then the sale of the shares "for taxes", with the cash raised distributed to the taxing authorities, resulting in no net cash to you.

You should care about the grants because the act of vesting creates reportable "compensation income" to you based on the gross number of shares vesting, not the net.  The RSU "wizard" can handle all this for you.

If you don't want to do all this and only want to see the vested amount and the amount of shares distributed to you then one way of doing that might be to create a new non-connected "brokerage" Account in your file.  When shares vest you do an Added action on the date of vesting, with $0 cost basis.  When the actual shares are distributed you make the vested shares disappear by a Remove action for all the shares.  This has no $ effect on your file.

Then in your real brokerage Account you can do an Added for the net shares received, at the correct price per share.