@YaMu until the shares vest, there is no tax consequence.
When they vest, there are WITHHOLDINGS in your W-2. That is not tax; tax is only calculated on a tax return and then the withholdigns are applied to determine if you owe more or get a refund.
When the shares vest, you pay ordinary income tax, just as if it were salary and wages.
however, when you sell the shares, that is subject to capitgal gains tax.
Let's use an example,
Let's say you had 1200 restricted shares given to you that vest 1/3 each year.
The first 1/3 (400 shares) vested on 6/1/22 when the stock was selling for $30 per share. That means there is $12,000 of ordinary income dumped into your paystub (and W-2). Federal and State tax withholdings plus medicare and Social Security taxes are withheld. Imprortantly, that creates a cost basis of $30 per share of the shares that are given to you. Let's assume that you only receive 225 shares of the 300 as the other 75 were sold to pay the taxes and withholdings.
Now, in JUne 2023, you decide to sell the 225 shares. The stock price is now $60. Your proceeds are $13,500 ($60 times 225) and the cost basis is $6750 (225*$30 per share). So you have a capital gain of $6750 ($13,500 - $6750) and will pay capital gains tax on the profit.
Let's say the stock tanked to $10 and you sold. The processed are $2250 and the cost basis is still $6750. THat loss of $4500 can be a) netted against other capital gains you have, b) the first $3,000 can be used to reduce your ordinary income or c) the remainder can be deferred and used in the same manner as a) and b) next year.
