When do I owe taxes on RSUs?

You owe ordinary income tax when RSUs vest (not when you sell). If the stock is worth $100 and 100 RSUs vest, you owe income tax on $10,000. The company usually withholds shares to cover taxes. This can be a big cash event if the stock price is high.

What is net-share settlement vs gross-up?

Net-share settlement: Company withholds shares to cover taxes. You receive fewer shares. Gross-up: Company pays your taxes in cash or additional shares so you keep all shares. Gross-up is much better but rare.

What if the company is acquired?

RSUs have "single-trigger" (vest automatically on acquisition) or "double-trigger" (vest only if you're terminated post-acquisition). Double-trigger is better for you; single-trigger means you keep all shares regardless.

When do I owe taxes on RSUs?

You owe ordinary income tax when RSUs vest (not when you sell). If the stock is worth $100 and 100 RSUs vest, you owe income tax on $10,000. The company usually withholds shares to cover taxes. This can be a big cash event if the stock price is high.

What is net-share settlement vs gross-up?

Net-share settlement: Company withholds shares to cover taxes. You receive fewer shares. Gross-up: Company pays your taxes in cash or additional shares so you keep all shares. Gross-up is much better but rare.

What if the company is acquired?

RSUs have "single-trigger" (vest automatically on acquisition) or "double-trigger" (vest only if you're terminated post-acquisition). Double-trigger is better for you; single-trigger means you keep all shares regardless.

AI Contract Analysis

RSU Agreement Review — Understand Your Restricted Stock Units

RSUs are shares that become real stock when they vest. Unlike options, RSUs have value from day one (they're worth the stock price). But your RSU agreement can hide traps: vague vesting terms, unfavorable tax treatment, clawbacks, and weak M&A protection. Our AI dissects every clause and explains when you own actual shares, how much tax you'll owe, and what happens in an acquisition.

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