Reply To: Monthly vesting RSUs, sell-to-cover wash sale

Home Fairmark Forum Equity Compensation Monthly vesting RSUs, sell-to-cover wash sale Reply To: Monthly vesting RSUs, sell-to-cover wash sale

#2381
sushobhan
Participant

Thank you so much for the clarification. I have a follow-up question which relates to the second example provided by IRS here: https://taxmap.irs.gov/taxmap/pubs/p550-026.htm#TXMP212cbd13 (reproduced below)

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Example 2.(p58)
You are an employee of a corporation with an incentive pay plan. Under this plan, you are given 10 shares of the corporation’s stock as a bonus award. You include the fair market value of the stock in your gross income as additional pay. You later sell these shares at a loss. If you receive another bonus award of substantially identical stock within 30 days of the sale, you cannot deduct your loss on the sale.
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Does this bonus not count as ‘compensation’ because it’s a one-time award? Or is it a wash sale because you personally sold the shares instead of them getting automatically sold for taxes?

Also, does this mean if I sold shares with a loss outside the automatic sell-to-cover schedule, it would be a wash sale, e.g. I vested 70 stocks on June 15, sold 50 of them at a loss on June 30 and vested the next batch on July 15?

Thanks a lot!