Holloway Guide ToEquity Compensation
Common questions covered here
How are different types of equity compensation taxed?
How can I compare the ways equity compensation is taxed?
Are all types of equity compensation taxed the same?
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Tax Comparison Table

Table: Comparing Taxes on Types of Equity Compensation

This table is a summary of the differences in taxation on types of equity compensation.

Restricted stock awardsISOsNSOsRSUs
Tax at grantIf 83(b) election filed, ordinary tax on FMV. None otherwise.No tax if granted at FMV.No tax if granted at FMV.No tax.
Tax at vestingNone if 83(b) election filed. Ordinary tax on FMV of vested portion otherwise.No tax if granted at FMV.No tax if granted at FMV.Ordinary tax on current share value.
Tax at exerciseAMT tax event on the bargain element. No ordinary or capital gains or employment tax.Ordinary tax on the bargain element. Income and employment tax.
Tax at saleLong-term capital gains tax on gain if held for 1 year past when taken into income. Ordinary tax otherwise (including immediate sale).Long-term capital gains if held for 1 year past exercise and 2 years past grant date. Ordinary tax otherwise (including immediate sale).Long-term capital gains if held for 1 year past exercise. Ordinary tax otherwise (including immediate sale).Long-term capital gains tax on gain if held for 1 year past vesting. Ordinary tax otherwise (including immediate sale).
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