Options Book Learn how to get the most from your stock options or other equity compensation. The plain language tax guide for everyone who buys and sells stocks, mutual funds and stock options, from beginners to trading professionals. If the stock is vested when you receive it, you have to report compensation income at that time. Otherwise the stock is restricted, and you won't report compensation income until the stock vests.
Stock is vested when there's no risk of forfeiture .
We'll take you through the rules for grants of vested stock, then explain the rules for restricted stock. For more details on what it means for stock to be vested, see When Stock Is Vested . If your stock is vested when you receive it, you have to report compensation income equal to the value of the stock on the date of the grant or award. That's true even if you don't sell the stock, so you haven't received any cash. If you're an employee, the company has to withhold on the value of the vested stock you received.