If you have a sizable benefit at the time you purchase the shares but the stock price declines sharply afterward, you can end up paying tax on phantom income if you make a disqualifying disposition. (fairmark.com)
«Some people refer to that as phantom income because no cash is trading hands,» says Rob Dietz, a housing economist with the National Association of Home Builders. (turbotax.intuit.com)
Betterment basically invents phantom income from offsetting phantom tax gains that no sane person would have voluntarily realized. (earlyretirementnow.com)