How to add stock options, RSUs, Defined Benefit Plans, etc.
This article will review how to add stock options, RSUs, Defined Benefit Plans, etc.
Last published on: August 29, 2025
If you'd like to include stock options (ISOs, NSOs), RSUs, or another type of stock compensation, or a defined benefit plan in an Income Lab plan, you have several options. The option you choose will depend on the asset, how it will be taxed, and how you'd like it to be reflected in your plan. Below you will find a description of each method and, at the bottom of this article, a video that outlines these approaches.
Enter as a "Non-Qualified Deferred Compensation" Account
Add the asset as an Investment Account with the "Non-Qualified Deferred Compensation Plan" account type. Then use the distribution settings to customize how the asset will be liquidated and received. The balance of the account will grow based on the average return from the asset allocation. All withdrawals will be treated as ordinary income.
This option is best if you'd like the asset balance to appear in Life Hub and in the portfolio balance, and if all funds will be taxed as ordinary income when they are withdrawn.
Enter as an "Other Income" source with "Investment Income" tax treatment
Add the asset as an "Other Income" source, then select "Investment Income" as the tax treatment. You can then specify how much of the income is treated as tax-free, long-term capital gains, or ordinary income. The investment income tax treatment will allow you to have more control over how the income will be taxed. This is the best option when you need to include a mix of tax treatments for when the asset is taxed.
Enter as an "Other Asset" with a planned sale
Add the asset under the "Other Assets" section. Then check 'Include a planned sale'. You can enter when the sale will occur, the sale price, and the adjusted basis at sale. The amount received that exceeds the basis will be treated as long-term capital gains. That means this approach can only be used when the asset will have capital gains treatment. This may work well for NSOs. This approach also only works when the amount will be received as a lump sum. (Of course, it is possible to enter several 'Other Asset' entries in this way.)
Video: How to add Stock options, RSUs, etc.
Video Transcript
welcome this video will walk you through
0:04
how to add stock options restrict your
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stock units deferred benefit plans or
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deferred compensation plans in your
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income lab
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plan first click the pencil icon on the
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right side of your screen to get to your
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household
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edits because of the unique nature of
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these types of assets there's a wide
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variety of ways that you may need to
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enter it into the plan I will walk
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through those different situations here
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first the simplest way is to add it as a
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Deferred Comp a non-qualified Deferred
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Comp this option is very easy to enter
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the only downside here is that the stock
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options will grow at the rate of the
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portfolio and will get treated as
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ordinary
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taxes if those settings are fine then
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for that option here you'll enter your
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stock options on your assets page or
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your rsus here however you want to name
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it you'll open the account types here
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and then select non qualified Deferred
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Comp all the way at the bottom you'll
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select the ownership and then enter the
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balance or the amount of stock options
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or rcus the client has then click the
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gear icon and then from here you may
1:14
want to then enter distribution settings
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just so you can customize when the
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client wants to take income from those
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stock options and in what frequency so
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here we can say no the client is not
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currently taking distributions we either
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want to plan for Al lumpsum or
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installment here we'll keep it as
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installments happening every month but
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you can open the field to happen once a
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year we can choose the first the next
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installment or the first starting date
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of the installments and then we can
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either select an end date here by
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unchecking the box or keeping the
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default here to have it continue through
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the end of the plan you can then also
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use the distribution method here to
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select whether you want those
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installments to be stretched over the
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time period if you want to factor a
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specific dollar amount coming out which
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you can then select the inflation
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treatment or if you want to Model A
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Certain percentage coming out as
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income once you're done you can hit save
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and then save again on the right side so
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that's the first option now with stock
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options or rsus um that have more
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specific taxation what you'll do is
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instead of adding it here under the
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assets page for those situations where
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you do do need to be more specific on
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the taxation of that income when it
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comes out you do want to then head to
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the income section find the other income
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tab here and then similar to how I've
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added it here you can call it stock
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options rsus again whatever you want to
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name it you can put in the amount here
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I've added an annual uh cash flow coming
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in but if it's monthly you again just
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want to set up that specific frequency
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and put the appropriate amount here as
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well you can select the ownership and
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then for this option what you want to do
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here is Select tax treatment and then
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select investment
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income after that click the gear
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icon you can have it not adjusted for
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inflation or automatically adjusted for
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inflation but by choosing the investment
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income option this allows you to break
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down the taxation in more detail so here
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we can put in a split of how much should
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be treated as ordinary income and if
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there's a portion that should be treated
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as long-term capital gains we can put
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that here or if there's portion that
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should be non tax or tax exempt this
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really allows you to get more detailed
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on how that income should be taxed so
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that way we calculate the taxes
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appropriately there from there you can
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either set up the frequency so whether
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it's recurring every year or every month
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or if it's a one-time lump suum coming
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in you can then also select the start
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and stop dates below click save when you
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are
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finished the last option here when
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you're adding uh RSU stock options
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assets like that is you can either go to
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the assets page here and then under your
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other assets you can add it as an other
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asset so here we can put those stock
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options the ownership type you can
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either call it business or other and
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then put in the value you'd want to
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enter it here if you're planning for a
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one-time sale of those options so if
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you're planning for you know onetime
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income uh invent coming out this is the
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easiest place to add that as another
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asset click include planed sale select
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plan sale price you can put in the
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future date in which you plan on the
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income coming in you can enter the plan
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sale price below and then you can add
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any adjusted basis at sale here just to
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again make sure we're calculating the
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taxes accurately the one thing to note
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with this option though is that it will
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treat the income here as long-term gains
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and so again if that is not your
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intention on the taxes that's not how
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you want to model you may use some of
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the other uh options that I reviewed
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earlier in this tutorial however if this
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is what you're hoping to show with uh
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one time kind of outflow coming from
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those stock options going into the plan
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and then factoring in part of the
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taxation this is a great option to use
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thank you for viewing this video we hope
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this helps please reach out to our team
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if you have any questions