What is the cost basis when restricted stock or RSUs vest in the United States?

The IRS says if you receive property for your services and it is subject to restrictions, your basis is its fair market value when it becomes substantially vested, unless you elected to include it earlier. It becomes substantially vested when it is transferable, or when it is no longer subject to a substantial risk of forfeiture. At that time you include the fair market value, minus anything you paid, in income. A restricted stock unit is a promise to deliver stock later. You cannot elect to include the value in the year of grant, because no property has been transferred yet. Example only. The IRS example is stock you must return unless you complete 5 years of service. You report no income until those 5 years are complete. This page does not work out your tax.

Continue on IRS · Publication 551