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questions about RSU

17 10 October 16, 2017 at 03:27 AM
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Hi, I work for Amazon, and after you are employed by them for 2 Years you get your RSU's, and more if you continue to stay.

I will be getting mine around Dec of this year and had a few questions.

1. Once the stock are made available to me can I transfer them from the company amazon used to give the stocks out ( JP Morgan) to another brokerage? (Might be a really dumb question sorry?

2. As soon as the stocks are made available, do I own any taxes on them? Since it's right before the new year.

3. (Your opinion) since I'm only 23, should I just hold these stocks? Reading online people are split, some say when you get RSU's sell them right away, some say hold them. I am for the most part financial stable.

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Last edited by YanksIn2009 October 16, 2017 at 04:47 AM.
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Assuming you were granted the stock (did not pay into some discount employee purchase plan), then they are considered income you pay taxes on which I assume are withheld before converting to an actual number of shares. You should check with your plan admin as you do not want any surprises come tax time.

As to letting some company brokerage hold them, that really is up to you. If they charge a commission to sell, then I would transfer them to a discount brokerage assuming the company lets you do that (can't see why not as they are your property at that point). Make sure there are no fees for that as well. Most company brokerages are complete rip off artists in my experience and just look for ways to get fees out of you.

As to whether to hold the stock or not, that was never an issue for me as I always worked for shitty companies I would never even consider holding long term. In your case, if you think the stock will do well in the next year or got a serious discount off the current price and would incur a large gain if you sell, then holding it for cap gains purposes might not be the worst move. If you think the stock will go down, then just cash it out imo. I have never been a big fan of holding a lot of one stock long term, but that is me.
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#4
Quote from nagzz1994
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Hi, I work for Amazon, and after you are employed by them for 2 Years you get your RSU's, and more if you continue to stay.

I will be getting mine around Dec of this year and had a few questions.

1. Once the stock are made available to me can I transfer them from the company amazon used to give the stocks out ( JP Morgan) to another brokerage? (Might be a really dumb question sorry?

2. As soon as the stocks are made available, do I own any taxes on them? Since it's right before the new year.

3. (Your opinion) since I'm only 23, should I just hold these stocks? Reading online people are split, some say when you get RSU's sell them right away, some say hold them. I am for the most part financial stable.
1) as long as the shares are clear you should be able to transfer wherever you want, but you're probably going to get hit with some fees. usually, wherever the shares are held you get steep discounts to keep the stock there(and sell the shares). with my company we use etrade and I usually transfer the shares from the stock plan account to a regular brokerage account so I can put it in the margin account(and only pay 6.95 if I sell)

2) taxes depend on what you elected. usually the default is to hold shares = to the tax rate. youre going to have to figure that out on your own.

3) since you work for amazon id hold them. youre locked into a pretty well diversified company. that being said my strategy with my company is to always sell the shares, and invest it in something else, since im pretty much always going to be getting reloaded more stock and espp shares.
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#5
Amazon has been a great stock to hold up until this point. Going forward nobody can predict where it will go. There are strong arguments against having both your source of income, and retirement wealth tied to the future of a single company (see Enron). The contra argument is that many people have gotten wealthy off RSUs in their companies as well. Here is how you should approach the decision:

If tomorrow Amazon gave you a cash bonus equivalent to the cost of these RSUs, would you invest it into Amazon stock, a broadly diversified index, or something else? Your decision is 100% financially equivalent to this decision. The reason companies grant RSUs instead of cash is primarily because people fear selling what they have to miss out on a good thing vs making a conscious decision of how to invest the money.
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#6
I would just stay with the stock don't make it complicated. As long as there are no fees you will be fine.

My company stock has me up over 20% this year I prefer to go with what I think will do well. My company is pretty heavily regulated so no Enron's for me.
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#7
this article helps answer some of your questions on RSUs

https://www.cnbc.com/2015/07/20/h...units.html
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#8
Hi, RSUs are not Stock until they are vested and released to you.

If you are receiving a grant of RSUs, check the grant agreement to see when will the units become vested.

At the time of vesting, your RSUs will then convert to stock and you will need to pay ordinary income taxes based on the fair market value of AMZN on such date. Typically, taxes will be withheld by your company either through 1) withholding a portion of the shares or 2) sell a portion of the shares on open market. Check with your plan admin to see what yours choices are. Unless you want to hold onto 100% of the shares, you should not have to write a check to your company for the taxes.

And yes, having RSUs vesting toward the end of the year could push you into a different income tax bracket, so right now might be a good time to check if this will happen, if so, you can adjust your 401k contribution (if not already maxed out) to keep yourself in the lower tax bracket.

And yes, once the RSUs are vested and converted to Stock, you can move the shares to your own brokerage account.
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#9
Since we've got hold of an Amazon employee, I'll venture and ask this. Do you have access to any employee discount codes you'd like to share? PM me
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#10
Quote from MikeJensen
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Since we've got hold of an Amazon employee, I'll venture and ask this. Do you have access to any employee discount codes you'd like to share? PM me
I do get a code, but I've used it all
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