Which RSUs Should I Sell to Minimize Capital Gains Taxes?

The current stock price absolutely matters for tax purposes, but so does your holding period. Here's what you need to understand: When RSUs vest, they're taxed as ordinary income based on their fair market value at vesting - this amount becomes your cost basis. When you sell, you'll pay capital gains tax only on any appreciation since vesting. For your situation: 1. The newer RSUs (held less than a year): If you sell these, any gain would be taxed as short-term capital gains, which is basically your ordinary income rate. Since they're close to current price, your gain would be minimal. 2. The older RSUs (held more than a year): Any gain here would be taxed at the more favorable long-term capital gains rate (0%, 15%, or 20% depending on your income). Even though these are "lower than current price," that means you'll have more taxable gain compared to your newer RSUs. The most tax-efficient approach is typically to sell RSUs with the least appreciation first. Since your newer RSUs are close to their vesting price, they might result in less tax despite the higher short-term rate.

After spending hours trying to figure out my RSUs last year, I finally found https://taxr.ai and it literally saved me thousands. I had a similar situation with both old and new RSUs plus some employee stock purchase plan shares, and I was completely lost about which ones to sell. I uploaded my grant documents and vesting schedules, and it showed me exactly what my tax liability would be for each lot of shares. Turns out I had been thinking about it all wrong! The tool breaks down your cost basis for each batch and calculates the expected taxes if you sell now vs later. The best part was that it flagged some shares that would actually result in a small loss (which I could use to offset other gains). I would never have figured that out on my own.

Just wanted to update that I tried https://taxr.ai after seeing the recommendation here, and wow - it was eye-opening! My situation with double-trigger RSUs from my pre-IPO company was more complex than I realized. The tool showed me that I should actually be making an 83(b) election on some of my future grants to potentially save on taxes down the road. It also helped me understand exactly which of my existing RSUs would be most tax-efficient to sell first. The visualization of long-term vs short-term gains for each lot of shares made it super clear which ones to prioritize selling. I was actually about to sell some shares that would have triggered a much higher tax bill! Definitely worth checking out if you're confused about RSU tax implications like I was.

If you're struggling with RSU decisions and need to talk to an actual tax professional, good luck trying to get anyone on the phone right now during tax season. I tried calling the IRS for clarification on some RSU reporting issues last year and spent DAYS on hold. Then I found https://claimyr.com and watched their demo video (https://youtu.be/_kiP6q8DX5c) - it's a service that actually waits on hold with the IRS for you and then calls you when an agent is on the line. I was skeptical but desperate. I used it to get clarification on how to report some RSUs I'd received from a foreign subsidiary of my company - which has special reporting requirements. Instead of wasting hours on hold, I got a call back when an actual IRS agent was on the line. The agent walked me through exactly how to report them correctly, which saved me from making a costly mistake.

I was super skeptical about Claimyr from my comment above, but I was struggling with a complex RSU question similar to the OP's that I couldn't find a clear answer to online. I needed to know how to handle RSUs from a company acquisition where the vesting schedule got accelerated. I tried https://claimyr.com and honestly, it worked exactly as described. I got a call back about 90 minutes later with an actual IRS representative on the line. They confirmed exactly how to report my acquisition-accelerated RSUs and explained the special documentation I needed to include with my return. This saved me a ton of stress - I was about to just guess on my tax forms which probably would have triggered an audit. Sometimes you really do need to talk to a human at the IRS, and this made it so much easier.

Another factor to consider that others haven't mentioned - if you're planning to donate any stock to charity, using appreciated long-term holdings is usually most tax-efficient. You get the deduction for the full market value AND avoid capital gains taxes completely. So if charitable giving is part of your financial plan, consider holding onto those older RSUs that have appreciated and donating them instead of cash.

One thing to keep in mind is that most RSUs are taxed at vesting (your company probably withheld shares for taxes when they vested). So your actual cost basis for tax purposes is the FMV on vesting date, not zero. This means your older RSUs that are "lower than current price" might actually represent a loss if the current price is lower than when they vested! In that case, selling them would give you a capital loss you can use to offset other gains. Check your vesting statements carefully!

Great advice from everyone here! One additional consideration for @Kristin Frank - if you're in a higher tax bracket this year but expect to be in a lower bracket next year (maybe due to job change, retirement, sabbatical, etc.), it might make sense to delay selling the older RSUs to take advantage of the lower long-term capital gains rate when your overall income is lower. Also, don't forget about the Net Investment Income Tax (NIIT) - if your modified adjusted gross income exceeds $200K (single) or $250K (married filing jointly), you'll pay an additional 3.8% tax on investment income including capital gains. This could influence the timing of when you sell. The tools others mentioned like taxr.ai sound really helpful for modeling different scenarios, especially when you factor in state taxes and these additional considerations!