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These "incentive units" are capital assets and if you sell them and realize any gain - that gain is usually treated as capital gain.
Because at the time of the grant and at the time of vesting the value of these units were zero - the basis was not established - and you did not invest any money.When you eventually exercised vested units - the difference between the FMV (which is actual selling price) and granted price (which was zero in your case) - is reported as wages - because you were awarded as a compensation for your services as an employee.So - that amount is reported on W2 as wages AND added to your basis.When you will report the sale transaction on your tax return - most likely - you will not have any gain or might realize a small loss if the broker charge any fee to handle that transaction.
But essentially your basis and your selling price would be same - and you woudl not have any capital gain.
Still you will need to report the sale transaction on your tax return.
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