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Level 6
June 30, 2020
Question

RSU exercised and sold. No W-2 as taxpayer is no longer in the US. Estimates paid

  • June 30, 2020
  • 10 replies
  • 52 views

This is the 1st time I have come across this.  Tried searching the IRS website and either I am an idiot or am just confused  (or both).  Client moved back to Australia during 2018.  She is not a US Citizen.  she needs to file in the US as she exercised and then sold some RSU from her last US job  (she does still work for the same company, but in Australia).  She had told me about this in 2018, so I did file Form 8833 - Treaty-Based Return Position Disclosure and Form 8854 Initial and Annual Expatriation Statement.   I will be filing them this year as well as she does still need it as the Annual Expatriation statement.  Whereas last year was the Initial year.

Normally, taxes are withheld and included on someone's W-2 for RSU.  The company did withhold taxes and send them in as estimated payments.  For the life of me, I can't think of where to report this income on Form 1040.  The stock sales, that I know I would report the normal way.  but the exercise of the RSU, as I said, it is normally included as part of the W-2.  No W-2 issued in this case

She wasn't in the US at all during 2019.  Moved back to Australia in October 2018.  Thanks in advance for any help

 

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10 replies

rbynaker
Level 13
June 30, 2020

Seems like an odd situation.  I'll page our resident expert @itonewbie 

The RSUs I've seen aren't exercised, they just vest.

DTNY07Author
Level 6
June 30, 2020

Thanks for tagging the person.  If you're saying it is odd, then I don't feel as clueless as I did.

 

qbteachmt
Level 15
July 1, 2020

Are you sure these were not already fully vested and also already taxed? It seems strange to give rights not vested to someone also no longer an employee.

I see this article:

https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp

And this one:

https://www.taxact.com/support/1035/2019/restricted-stock-units-rsus-and-backup-withholding

Don't yell at us; we're volunteers
sjrcpa
Level 15
July 1, 2020

I'd report it as wages, with no W-2. If Jensen says different then listen to him.

The more I know the more I don’t know.
DTNY07Author
Level 6
July 1, 2020

That thought crossed my mind.  But, I wasn't sure if it made sense.  Thanks for the info

BobKamman
Level 15
July 1, 2020

Does she still have a US resident visa (green card) ?

DTNY07Author
Level 6
July 1, 2020

No, she gave it back when she left in October 2018. I recorded that on Form 8854 on the 2018 return

DTNY07Author
Level 6
October 8, 2021

This year same situation with the stock.  But they issued her a W-2.  Weird, but easier for me this time around