RSUS tax in the US

Forum|Forum|3 years ago
December 31, 2022
4 replies
35 views

I have RSUS issued by a European Company in 2020 back in India. I relocated to US in Sept 2022. How will these be taxed when they vest in Jan 2024 in the US?

Not A Product Question

Anonymous_

Level 15

@pk12_2

pk_

Level 15

@Rajat , can you give me a little more detail --- (a) RSU from a subsidiary of a Euro( country ? ) entity or directly by a Euro entity I.e. the RSUs are share of the Indian registered entity or what ?; (b) the shares are publicly listed in which exchange ( Euro, India, USA etc. ); (c) you entered USA in Sept 2022 for the first time ( or returning ) and with which visa ( or are you resident ) ?

Once I hear from you I have circle back

Namaste

RajatAuthor

Level 2

RSU is from European parent company. It's a private company. It's First time in USA in Sept 2022 on L1 visa.

pk_

Level 15

@Rajat , first an apology for delay in my response -- please forgive.

second -- Namashkar

third --- only reference to RSU in Europe I could find was from France and it appears to be similar in nature to the US version and since the granting was prior to your entry to the USA ( I am assuming three/ five year vesting ), my suggestions are as follows :

1. If you are absolutely sure that you are going to be present in USA till after the vesting ( 2024 ), you could recognize the 2023 gain ( or allocated gain depending on the financial year of the granting entity ) i.e. current transfer/ market value LESS market value when you were granted the shares -- this would have been reported as "payment in shares on your pay stub and probably got taxed by India . Then you do the same for 2024. And then do the same for 2024 except the basis is now that of start of 2024 because you had already accounted for 2023.

2. You can also ignore the whole thing for the time being 2024 when the units are vested and use the then market value less grant value ( already taxed by India ) as your gain and pay taxes on that. This is also the path if there is a good chance that you would not be in USA at vesting time.

If you need more detailed discussion then I would need to know (a) did India tax the original grant value; (b) when were these granted; (c) are these shares transferable in OTC ( or similar ) or you have to sell them back to the granting entity ; etc. etc.

Does this make sense ? Is there more I can do for you ?