| ▲ | gruez an hour ago | |
>2. A sudden price drop causes 100 shares to vest at $50. After tax that's 60 shares * $50 = $3000. [...] This is only true if you "sell" 40 shares immediately at the time of vesting to pay the tax bill. Because you lose the 40 shares, you don't have as much shares to appreciate in the subsequent upswing. However if you prefer to settle your tax obligations in cash instead, you don't have this issue and you'd actually pay less taxes (assuming the upswing does materialize). It's risky though, because you're basically taking a long position on the stock, and if it falls even more, you'd lose even more money. | ||
| ▲ | triceratops an hour ago | parent | next [-] | |
> This is only true if you "sell" 40 shares immediately at the time of vesting to pay the tax bill I wasn't aware there's a choice. That's a paycheck withholding essentially. | ||
| ▲ | pxx an hour ago | parent | prev [-] | |
Paying taxes isn't optional. Sure you can invest more in the stock with external funds but that's not a fair proposition. If you were to tell me there's a certain chance of a stock going up by 100% we could also just buy calls with those magic funds and make far more money. | ||