Q:

What Shares Do I Actually Have?

I have a pretty standard arrangement with an LLC I'm employed by. I have unvested units and a vesting schedule for when they become "vested" units. I used vested in quotes because the LLC's Operating Agreement holds that the units are forfeited, even after vesting, 24 months after I leave the LLC.
As I understand it, that's not actually vesting.
These units can be exchanged into "full" units, which are permanent, but only by a vote by the board, not by time, performance, or any other factor I can control.
What kind of units do I actually have? What are the tax implications (compared to vested) of this type of unit?

A:

Tax wise, you simply report the income from your units like any other shareholder or LLC member it's just at some point the income will go away. And go away it will, unless you demand your units be made permanent while you remain with the LLC. Once your employment ends the LLC has no reason to make your units permanent.
I wouldn't get hung up about the definition of "vesting"; it has little legally defined meaning. You have units you control until 24 months after leaving employment. That's really all that matters.
Unless your income from the LLC units is very high I would likely run from this. It sounds like a bum deal to convince suckers into thinking they get something when there's nothing.
If you stay in this employment you should seek an attorney. This smells fishy.

