Taxed at vesting, first
RSUs are taxed as ordinary income the moment they vest, based on the fair market value that day — regardless of whether you sell. Your employer typically withholds shares to cover this, but the default withholding rate often under-covers your actual bracket.
Taxed again at sale
Any gain between the vesting price and your eventual sale price is a capital gain — short-term if held under a year, long-term after. This is the tax event people forget to plan for, because it feels like the RSUs were "already taxed."
The planning mistake to avoid
Selling immediately at vest avoids the second tax event entirely and resets your cost basis to the vesting price — often the cleanest strategy unless you have a specific reason to hold.
