Question on expiring RSUs

GarthTallin

I have RSUs (restricted stock units) from a former employer that are due to expire in the future. This company is privately held and there is currently no market for the RSUs; the promise was that if the company went public, the RSUs would be converted to common stock. When the RSUs vested, I needed to pay ordinary income tax on them based on the fair market value. If they expire, is there a way for me to recoup what I paid in taxes for the RSUs or otherwise declare a loss on them?

KeriC

You likely won’t be able to directly recover the ordinary income taxes you paid when the RSUs vested. However, claiming a capital loss for the cost basis (FMV at vesting) on your tax return provides some opportunity to offset the tax impact.

IRS Publication 550, page 54 contains additional information on worthless securities
https://www.irs.gov/pub/irs-pdf/p550.pdf