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Comment by realbarack | Hacker News Reader

You're missing an important caveat in number 1, which is the tax implications. You've got to compare selling immediately and paying regular income tax vs selling in a year and paying long term capital gains tax.

If you can beat that difference regularly in the market then you're probably in the wrong industry...

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When the stock units vest (or are exercised in the case of options), you are taxed on their current value at the regular income tax rates. What would be taxed at the long term capital gains rate are any gains that happen _after_ the stock is in your possession. The former component is likely the one that will dominate within the timespan of a year.

Not in the case of Incentive Stock Options. They are taken into account with AMT, but you do not pay regular income tax at the time of exercise. If you have ISOs, selling within a year is subject to regular income tax, but if you exercise and hold the shares for more than a year, you only pay cap gains tax. And if they have a low strike price relative to current value, the difference can be quite significant. I know this because I'm dealing with precisely this situation right now and trying to decide my best move. I'll probably hedge my bets and do some of each.

Right but the subject at hand here is rsu not iso.

Cap gains is only on the stock's growth in the year after it vests. It's possible the stock doubles or more in a year, but generally unlikely.

Also, this is functionally equivalent to auto-selling RSUs and immediately repurchasing shares with the proceeds, from a tax perspective. RSUs should literally be treated like cash bonuses for public company employees - you should only keep the number of shares you would buy out of your paycheck.

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