As long as each portion remains unvested, you report as dividend from that
portion as income in paycheck detail. As segments vest, those shares report
real dividends and less gets reported in paycheck.
Set up stock as you indicated at a zero price. When each segment vests, you
have a sell to cover transaction except you don't need to sell anything.
The whole amount of vested segment gets reported as ordinary income.
I don't know how we'll handle the tax treatment of that vesting since you
won't have cash that comes from exercising a vested option. My assumption
is that the firm will arrange to sell a portion of stock to cover taxes (for
us it's usually a standard 35%) or associate will get option to pay tax
directly. Paying at end of year won't be an option because payroll program
automatically recovers deficits in witholding at next pay period.

I'm assuming that you did not do a Special Tax 83(b) Election since it's
required within 30 days of the award. You essentially pay your income tax
at the award for the full award at that market price vs. the normal method
of paying at vesting a segment at that hopefully higher market price. It
then starts the clock on capital gains treatment.

"mfogarty" <mfogarty[at]discussions.microsoft.com> wrote in message
news:686A67BD-AC55-4626-BD51-9204B136BC1A[at]microsoft.com...
- quote -

Many companies are moving away from granting stock options to granting
restricted stock. It does not appear, however, that Money 2005 or Money 2006
have functionality for restricted stock. Restricted stock is similar to
stock options in that it usually vests over a period of time, but instead of
exercising the option, the stock is simply granted to the employee. If it
was that simple, I could simply enter the stock as an option with a 0 strike
price. The real issue is that the stock pays a dividend during the vesting
period that is paid to the employee and is taxed at ordinary rates. Once the
restricted stock vests, however, the dividend is taxed at the new 15% rate.

Any suggestions?