Chicago, IL asked in Employment Law, Tax Law, Banking and Securities Law for Illinois

Q: I got stock as bonus, but the stock price dropped. Now I owe tax on original amount but the stock isn't worth to cover.

I received stock in the form of RSU, but at the time it was over $100 a share higher than it is now. Now I'm being taxed off of the original stock amount since it is looked at as a "cash bonus", but even selling the stock I can't raise the capital needed to cover that tax burden. Also, I'd be taking a loss at selling my current position. How is this possible? Where do they expect me to get the capital needed when the stock price has basically gone to nothing from when it was originally appointed to me? My tax accountant says that I can only offset $3k in losses per calendar year.

1 Lawyer Answer
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: The taxation of RSUs can be complex, and it's unfortunate that the stock's value has dropped significantly. You're correct that capital losses can often be used to offset capital gains, but there may be limitations on the amount you can deduct in a given tax year. I recommend consulting with a tax attorney or financial advisor who can provide specific guidance on your situation and explore potential strategies to manage your tax liability.

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