Why Same-Day Sales Don’t Always Mean Zero Capital Gains

A common source of confusion is understanding why a same-day sale after exercising stock options can still result in significant capital gains tax. The short answer is that Sweden uses the average cost method (genomsnittsmetoden), which calculates your cost basis using all shares you’ve acquired from the beginning—not just the ones from that specific transaction.

When you have RSUs vesting at different prices over time, your average cost per share accumulates and changes with each vesting event. This means that when you exercise options and sell immediately, you’re selling shares at your weighted average cost—which may be significantly lower than the current stock price if your RSUs vested at much lower prices in the past.

Sweden requires the use of the average cost method for calculating capital gains on shares. Here’s how it works:

This method is designed to be fair and consistent, but it can produce counterintuitive results when you have mixed acquisition prices from different sources and time periods.

Let’s walk through a realistic scenario to see exactly how this plays out. Imagine you have both RSUs and stock options:

The average cost method is cumulative—it remembers every share you’ve ever acquired at every price. Here’s why this matters:

Early RSUs Create a “Memory Effect”

If your RSUs started vesting when the stock price was much lower, those early low prices establish a low baseline for your average cost. As the stock price rises over time and your RSUs continue to vest at higher prices, your average cost increases—but it never forgets those early cheap shares.

Options Exercise Dilutes the Average

When you exercise options at a strike price that’s lower than your current average cost, you’re adding “cheap” shares to your portfolio. This dilutes (lowers) your average cost per share. However, if the stock has appreciated significantly since your early RSU vests, the diluted average cost may still be far below the current market price.

Same-Day Sales Don’t Isolate the Transaction

A common misconception is that a same-day sale should use the cost basis from just that transaction. But Swedish tax law doesn’t work that way—every sale uses the current average cost, which reflects your entire holding history.

For a same-day sale to result in zero or near-zero capital gains, a specific condition must be met:

In most real-world scenarios—especially for employees of growing companies—your average cost is significantly lower than the current market price, so same-day sales will generate capital gains even when you sell immediately after exercising.

Understanding how the average cost method affects your taxes can help you plan more effectively:

Capital Gains Tax Rate

In Sweden, capital gains on shares are taxed at 30% on the profit (or you can use the schablon method which taxes 20% of the sale proceeds). This applies to all share sales, including same-day sales after option exercises.

Same-Day Sales Are Still Tax-Efficient

Even though same-day sales generate capital gains, they’re often still the most tax-efficient approach for selling shares from option exercises. The alternative would be to hold the shares and sell later, which could result in even larger gains (or losses) depending on future price movements.

The Benefit of Immediate Sales

Selling immediately after exercising minimizes the uncertainty of future price movements. You know exactly what your gain will be based on the current market price and your current average cost. Holding the shares introduces market risk—the price could go up or down before you sell.

“Same-day sales should have zero gains because I’m selling what I just bought.”

This would only be true if you had no prior shares. The average cost method doesn’t isolate transactions—it reflects your entire holding history.

“My cost basis should be the strike price of the options I just exercised.”

The strike price is factored into your average cost, but it’s averaged with all previous acquisitions. Your cost basis for the sale is thecurrent average cost, not just the option exercise price.

“Selling immediately should minimize my taxes.”

Selling immediately does minimize uncertainty about future price movements, but it doesn’t minimize capital gains tax. The tax is based on the difference between sale price and average cost, regardless of how long you hold the shares.

“I should have different cost bases for my RSUs and my options.”

Swedish tax law requires a single average cost for all shares of the same stock, regardless of how you acquired them. You can’t track separate cost bases for RSUs vs. options.