When does the long-term capital gains holding period start for RSUs and options?
For RSUs, the holding-period clock for long-term capital gains starts on the vesting/settlement date, because that's when you actually own the shares and when their value was taxed as ordinary income. Hold more than one year from vesting and any further appreciation gets long-term rates; sell within a year and it's short-term, taxed like ordinary income. For stock options, the clock starts on the exercise date, not the grant date – that's when you acquire the shares. ISOs add a second requirement: a qualifying disposition needs both more than one year from exercise and more than two years from grant. Because your cost basis equals the value already taxed, only the gain after vesting or exercise is at stake. Mark these dates in your records so you don't sell a day too early.
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