How to Track Stock Vesting (RSUs)

Restricted Stock Units (RSUs) are a common form of compensation. Tracking them requires handling the income event (vesting) and the subsequent capital gains (selling).

1. The Grant

When you are granted RSUs, you don’t actually own anything yet. You technically don’t need to record this in your main ledger, but you can track it in a separate “Shadow” account if you wish.

Most users skip this step and start at Vesting.

2. Vesting (The Taxable Event)

When shares vest, two things happen:

1. You receive shares (Asset).
2. You pay taxes (Expense), usually by selling some of those shares immediately (“Sell to Cover”).
3. You recognize the total value as Income.

Example:

• You vest 10 shares of GOOG.
• Market price is $100/share. Total Value: $1000.
• Tax rate is 40%. You “sell” 4 shares to pay $400 in taxes.
• You keep 6 shares.

2024-05-15 * "Employer" "RSU Vest - 10 shares"
  Income:Employer:RSU          -1000.00 USD  ; Total Grant Value
  Expenses:Taxes:Federal         400.00 USD  ; Taxes paid
  Assets:Brokerage:GOOG            6 GOOG {100.00 USD}

• Income: We record the full gross amount ($1000).
• Asset: We record the 6 shares we actually kept, with a cost basis of the market price at that moment ({100.00 USD}).

3. Selling

Later, when you sell the shares, you calculate Capital Gains based on that cost basis.

Scenario: Price rises to $120. You sell your 6 shares.

2024-08-01 * "Broker" "Sell RSUs"
  Assets:Brokerage:GOOG           -6 GOOG {100.00 USD} @ 120.00 USD
  Assets:Brokerage:Cash          720.00 USD
  Income:CapitalGains           -120.00 USD

• Cost: $600 (6 * 100).
• Proceeds: $720 (6 * 120).
• Gain: $120.

Employee Stock Purchase Plan (ESPP)

ESPP is different. You buy shares at a discount.

Example:

• Market Price: $100.
• Discount: 15% (You pay $85).
• You buy 10 shares.

2024-06-30 * "Employer" "ESPP Purchase"
  Assets:Brokerage:Cash         -850.00 USD ; You paid $850
  Income:Employer:ESPP-Discount -150.00 USD ; The discount is essentially income
  Assets:Brokerage:GOOG           10 GOOG {100.00 USD} ; Cost basis is Fair Market Value

Note: ESPP tax rules are complex (Qualifying vs Disqualifying dispositions). This method sets the cost basis to the FMV ($100), treating the discount as immediate income. Consult a tax professional for your specific reporting needs.