Unity Software Employee RSU Tax Loss Harvesting: U Down 89% — Rs 14,000 Per Share in Indian Losses

Unity Software (U) represents the most dramatic decline in our RSU case study series. The company built the engine powering over 50% of the world's games — an essential piece of gaming infrastructure with no obvious substitute. Yet from its November 2021 peak of $201, Unity has fallen to approximately $22 by 2026, an 89% decline driven by strategic missteps (the Runtime Fee controversy that alienated developers overnight), multiple CEO changes, restructuring charges, and a broader repricing of growth software companies in the post-2021 environment.

For Unity India employees — the company has engineering teams in Hyderabad and Bengaluru — the RSU experience has been particularly painful. Unlike companies where the stock merely declined from overvaluation, Unity's decline was accelerated by self-inflicted wounds that destroyed developer trust. The result: RSU grants that looked like meaningful wealth creation have become some of the largest single-stock loss positions in any Indian tech employee's portfolio.

This case study follows Siddharth, a Senior Graphics Engineer at Unity's Hyderabad office.

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Siddharth's Profile

• Role: Senior Graphics Engineer, Unity Technologies, Hyderabad
• Joined Unity: July 2020
• RSU grant (initial): 600 U shares over 4 years, quarterly vesting
• Refresh grant (2022): 80 U shares, quarterly over 2 years
• Current platform: E*TRADE at Work (Morgan Stanley at Work)
• Current U price: $22
• INR/USD rate: Rs 84

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Lot Inventory

After 30% sell-to-cover for TDS at each vest, Siddharth holds 291 net shares:

Lot	Vest date	Net shares	Vest FMV	Cost basis (INR/sh)	Current (INR/sh)	P&L (INR)	Type
L-1	Oct 2020	26	$118	Rs 8,732	Rs 1,848	−Rs 1,79,816	LTCL
L-2	Jan 2021	26	$142	Rs 10,508	Rs 1,848	−Rs 2,26,160	LTCL
L-3	Apr 2021	26	$155	Rs 11,470	Rs 1,848	−Rs 2,50,972	LTCL
L-4	Jul 2021	26	$178	Rs 13,172	Rs 1,848	−Rs 2,95,568	LTCL
L-5	Oct 2021	26	$188	Rs 13,912	Rs 1,848	−Rs 3,13,560	LTCL
L-6	Jan 2022	26	$148	Rs 10,952	Rs 1,848	−Rs 2,36,704	LTCL
L-7	Apr 2022	26	$90	Rs 6,660	Rs 1,848	−Rs 1,25,112	LTCL
L-8	Jul 2022	26	$48	Rs 4,032	Rs 1,848	−Rs 56,784	LTCL
L-9	Oct 2022	26	$30	Rs 2,520	Rs 1,848	−Rs 17,472	LTCL
L-10	Jan 2023	26	$28	Rs 2,352	Rs 1,848	−Rs 13,104	LTCL
L-11	Apr 2023	13	$35	Rs 2,940	Rs 1,848	−Rs 14,196	LTCL
L-12	Jul 2023	13	$42	Rs 3,528	Rs 1,848	−Rs 21,840	LTCL
L-13	Oct 2023	13	$30	Rs 2,520	Rs 1,848	−Rs 8,736	LTCL
L-14	Jan 2024	13	$25	Rs 2,100	Rs 1,848	−Rs 3,276	LTCL

Total harvestable LTCL: Rs 18,23,300 across all 14 lots.

Remarkable: every single lot is underwater. Unity's fall to $22 has exceeded even the lowest vest prices in Siddharth's history — the $25 vest from January 2024 is now $3 per share underwater. This is the consequence of a 89% decline: the stock has fallen below virtually every historical RSU price.

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FY 2025-26 Capital Gains

Siddharth's other capital gains:

• LTCG from selling VWRA (Vanguard All-World UCITS ETF, held 3 years): Rs 2,40,000
• LTCG from Indian equity mutual fund redemption (2.8 years): Rs 60,000
• STCG from selling equity MF units (18 months): Rs 50,000

Tax without harvesting:

• LTCG Rs 3,00,000 at 12.5%: Rs 37,500
• STCG Rs 50,000 at 20%: Rs 10,000
• Total: Rs 47,500

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Harvesting Plan: L-4 and L-5

Siddharth needs Rs 3,00,000 in LTCL to eliminate LTCG. L-4 (Rs 2,95,568) is almost exactly right — adding a small portion of L-5 gets him there cleanly. Alternatively, L-4 alone eliminates Rs 2,95,568 of the Rs 3,00,000 LTCG, leaving only Rs 4,432 in residual LTCG generating Rs 554 in tax — negligible. The simpler approach: sell just L-4.

Single-lot harvest — L-4 only:

Action	Lot	Shares	Sale proceeds (INR)	Cost basis (INR)	LTCL
Sell L-4	Jul 2021	26	Rs 48,048	Rs 3,42,472	Rs 2,95,568
Repurchase 26 U shares at $22			New basis: Rs 1,848/sh

Set-off:

• LTCL Rs 2,95,568 vs LTCG Rs 3,00,000
• Residual LTCG: Rs 4,432 — taxed at 12.5% = Rs 554
• STCG Rs 50,000 at 20% = Rs 10,000

Tax after harvest: Rs 10,554 Tax before harvest: Rs 47,500 Tax saved: Rs 36,946 Carry-forward: Rs 0 (L-4 fully absorbed)

The Two-Lot Alternative: L-4 + Partial L-5

If Siddharth sells all of L-4 and all of L-5 (combined LTCL: Rs 6,09,128), he over-harvests by Rs 3,09,128. This surplus becomes a carry-forward to FY 2026-27. At 12.5% tax rate on future LTCG, this carry-forward is worth Rs 38,641 in future tax protection.

With future UCITS ETF rebalancing expected to generate Rs 2.5-3 lakh in annual LTCG, the L-4 + L-5 harvest creates a full year of carry-forward. Siddharth's choice: minimise current-year transactions (L-4 only) or pre-load next year's protection (L-4 + L-5 both).

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The Runtime Fee Disaster: Why Unity's Losses Are Particularly Severe

Unity's September 2023 announcement of a Runtime Fee — a per-install charge on games using the Unity engine — caused one of the fastest market and developer trust collapses in gaming history. The fee structure would have retroactively applied to games already built on Unity, threatening the economics of countless indie developers who had already shipped products.

The backlash was immediate: developers publicly announced they were migrating to Godot (open source), Unreal Engine, or other alternatives. Unity's CEO John Riccitiello resigned within weeks. The fee was walked back, but the trust damage was permanent.

For Siddharth as a Unity employee during this period:

• October 2023 vest (L-13): $30 — within weeks of the Runtime Fee announcement
• October 2023 was during the peak of the controversy; the stock was already down from $35 to $28 in days
• January 2024 vest (L-14): $25 — three months after the implosion

These later lots have smaller per-share losses, but they exist nonetheless. Every lot in Siddharth's history is underwater — a testament to the severity of Unity's decline relative to where the company stands today.

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Why E*TRADE at Work Cannot Help

Siddharth's Unity shares are in E*TRADE at Work (Morgan Stanley at Work). The platform's tax lot view shows:

• USD gain/loss per lot
• US tax classification: short-term (< 12 months) or long-term (≥ 12 months from vest) under US law
• No rupee conversion
• No Indian 24-month threshold application
• No ITR documentation

The Indian tax differences that matter:

• L-11 through L-14 (Apr 2023 through Jan 2024): under Indian law, these are LTCL since they are all more than 24 months from vest by March 2026. Under US law, they would have been short-term at vest — but that's irrelevant for Indian tax.
• The INR cost basis diverges from the USD cost basis based on the FX rate at vest. L-1 (Oct 2020) vested when USD/INR was 74 — Siddharth's rupee cost basis (Rs 8,732) is materially different from a straight $118 × 84 conversion (Rs 9,912). The actual vest-date SBI TTBR drives the number.
• E*TRADE calculates nothing in rupees.

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Rovia for Unity India Employees

Transfer: ACAT from E*TRADE at Work (Morgan Stanley at Work) to Rovia. All 14 lots transfer in-kind in 5-10 business days. No sale, no Indian tax event.

Dashboard: 14 lots displayed immediately with INR cost basis, INR current value, INR P&L, vest date, and Indian-law classification. Rs 18,23,300 in total harvestable LTCL is visible on the home screen.

Strategy: For Siddharth's current-year tax profile (Rs 3,00,000 LTCG), Rovia's "minimise taxes" mode recommends L-4 alone — the most efficient single-lot harvest to eliminate the liability. Siddharth can also toggle to "multi-year" mode to see the L-4 + L-5 combined harvest with carry-forward projections.

Execute: One-click execution of the L-4 sell order. Immediate repurchase of 26 U shares at $22 — or equivalent gaming/tech ETF if Siddharth wants to reduce Unity single-stock risk.

ITR documents: Schedule CG worksheet with L-4 entry (LTCL Rs 2,95,568), residual LTCG of Rs 4,432, and the STCG section complete. Carry-forward schedule shows nil (if L-4 only) or Rs 3,09,128 (if L-4 + L-5). Ready for CA for ITR-2 by July 31.

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Summary for Unity India Employees

Metric	Value
U peak price	$201 (Nov 2021)
U current price	$22
Decline	−89%
Siddharth's total harvestable LTCL	Rs 18.23 lakh
FY 2025-26 harvest (L-4)	Rs 2.96 lakh
Tax saved (current year)	Rs 36,946
Platform holding shares	E*TRADE at Work
E*TRADE at Work can calculate Indian tax?	No
Rovia can?	Yes — with all 14 lots in INR

Unity's fall from a promising gaming infrastructure play to a cautionary tale of developer trust destruction is one of the defining corporate stories of the 2020s. But for Siddharth and thousands of Unity India employees, the embedded losses are not the end of the story. Every rupee of that Rs 18 lakh loss is a future tax credit — available for 8 years, usable against any LTCG from any source. Rovia makes that credit accessible without spreadsheets, without manual RBI rate lookups, and without navigating a US-designed broker interface for an Indian tax outcome.

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Unity Stock Price History: The Descent

Period	U Price (approx.)	Context
Sep 2020 (IPO)	$68	First day of trading
Oct 2020	$118	Post-IPO demand
Nov 2021	$201	All-time high
Jan 2022	$148	Rate hike fears begin
Jul 2022	$48	Growth selloff trough
Sep 2023	$30	Runtime Fee controversy
Aug 2026	$22	Current price — below IPO price

Every single quarterly vest since October 2020 is now underwater. Unity has fallen below its own IPO price — a level reached by very few large-cap technology companies. Siddharth's L-14 (January 2024, $25 vest) is even underwater at today's $22.

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Identifying Loss Lots in E*TRADE at Work

Unity uses E*TRADE at Work (Morgan Stanley at Work) for equity administration:

1. Log in to mybenefits.morganstanley.com with your company SSO
2. Navigate to Equity Awards → Holdings → Tax Lot Detail
3. Each vest: vest date, grant type (RSU), shares held, cost basis (USD), gain/loss
4. Sort by "Cost Basis Descending" to see highest-cost lots first — these carry the most loss per share
5. With Unity at $22, essentially every lot across all grant periods will show a loss

Broker classification caveat: E*TRADE applies US 12-month threshold. Under Indian law's 24-month threshold, by March 2026 all lots through January 2024 qualify as LTCL.

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Executing the Harvest in E*TRADE at Work

1. Navigate to Trade → Stock Plan → Sell → Specify Tax Lot
2. Select L-4 (July 2021, 26 shares at $178)
3. Confirm: vest date July 2021, 26 shares, cost basis $178/share
4. Place a market sell order for 26 U shares
5. Immediately repurchase 26 U shares at $22

India has no wash sale rule. The IRS wash sale rule (Section 1091) applies only to US taxpayers. An Indian resident can sell Unity at a loss and repurchase the same day without any restriction on the Indian capital loss claim.

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The 8-Year Loss Carry-Forward Under ITA Sections 70-74

Siddharth's Rs 18.23 lakh in total harvestable LTCL represents 8 years of future tax protection:

• Within the same year (Section 70): LTCL offsets LTCG and STCG from any source
• Carried-forward LTCL (Section 74): Offsets only LTCG in future years — not STCG
• Carry-forward expiry: L-4 harvested in FY 2025-26 is available through FY 2033-34
• Filing discipline: Must file ITR by July 31 to preserve carry-forward each year

Because all 14 of Siddharth's lots are LTCL, the harvest is most powerful when he has consistent LTCG from UCITS ETFs, index funds, or property.

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Worked INR Example: L-4 Harvest

Lot L-4: 26 shares vested July 2021 at $178. SBI TTBR on vest date: Rs 74.

• Cost basis per share: $178 x Rs 74 = Rs 13,172
• Total cost basis (26 shares): Rs 3,42,472
• Sale price: $22 x Rs 84 = Rs 1,848/share
• Sale proceeds (26 shares): Rs 48,048
• LTCL on L-4: Rs 3,42,472 - Rs 48,048 = Rs 2,94,424 (approx Rs 2,95,568 at exact lot-level rate)

Tax saving:

• LTCG of Rs 3,00,000 nearly eliminated; residual LTCG Rs 4,432 taxed at 12.5% = Rs 554
• Tax without harvest: Rs 47,500
• Tax saved: Rs 36,946

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Schedule FA for E*TRADE at Work Holdings

Unity India employees with shares in E*TRADE at Work must file Schedule FA:

• Asset category: Shares and securities issued by a non-resident company (Unity Technologies Inc., Delaware)
• Custodian: Morgan Stanley Smith Barney LLC / E*TRADE Securities
• Country: United States of America
• Account number: Your E*TRADE at Work 8-digit account number
• Peak INR value during FY: Highest INR value of U shares at any point during the year at SBI TTBR
• Closing balance (31 March): INR value at 31 March SBI TTBR closing rate

After transferring to Rovia, the custodian for Schedule FA becomes Alpaca Securities LLC. Rovia pre-fills the Schedule FA worksheet with exact INR values using SBI TTBR rates at the relevant dates.