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Financial Planning

Financial Planning explores various approaches to making the most of stock grant gains while minimizing taxes. The coverage includes the role of stock grants in gifts, estates and trusts, dividends, hedging, and more.

Browse an overview of this section below, or explore the subtopics to the left.


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Ten Financial Planning Rules Everyone With Stock Options Needs To Know

Michael Beriss
Managing your stock options is one of the most complex financial challenges you will face. These 10 rules will help you get the most out of your company's stock plan.

Reframing Your Stock Option Exercise Strategy In Volatile Markets This is premium content

Tom Davison
NEW! Your option grant terms and the behavior of your company's stock price are only part of your financial-planning story in volatile markets. Equally important is the price movement of what you will buy with the proceeds from an option exercise and stock sale. As this article explains, relative changes in price, not absolute changes, are what matter.

How To Avoid The Most Common Stock Option Mistakes (Part 1)

Beth Walker
Avoid the mistakes others made during prior boom markets and downturns. Common mistakes arise in nine different situations, including termination, mergers, financial planning, term expiration, and life events.

How Tax Rate Changes Impact Strategies For Stock Options & Restricted Stock (Part 1) This is premium content

Stanley Trotta with Robert Gordon
For now, it appears we have dodged a tax-increase bullet. However, President Obama's proposals will probably raise taxes after 2010. Should you take action with stock options and company stock now or wait until new rates apply? Part 1 looks at nonqualified stock options and restricted stock.

In Their Own Words: Financial Advisors On Company Stock Strategy For The Market Downturn

myStockOptions.com Editorial Team
NEW! The downturn in the stock markets, combined with the likelihood of tax-rate changes ahead under President Obama, affects planning for your company stock and grants. We asked financial advisors around the United States for their ideas on planning as the downturn plays out. Read their responses in their own words.

How Tax Rate Changes Impact Strategies For Stock Options & Restricted Stock (Part 2) This is premium content

Stanley Trotta with Robert Gordon
NEW! President Obama's proposals will probably raise taxes after 2010. Should you take action with stock options and company stock now or wait until new rates apply? Part 2 looks at incentive stock options.

How To Avoid The Most Common Stock Option Mistakes (Part 2) This is premium content

Beth Walker
Avoid the errors that many people have made, including mistakes that stem from major life events and taxes.

When To Wait, Hold, Or Sell: A Wealth Manager Reveals His Wisdom On Stock Option Exercise Strategy (Part 1) This is premium content

Tim Kochis
Once your stock options vest, you need a strategy to maximize their wealth-building value. But no single strategy fits everyone. This article discusses various approaches to planning your option exercises.

When To Wait, Hold, Or Sell: A Wealth Manager Reveals His Wisdom On Stock Option Exercise Strategy (Part 2) This is premium content

Tim Kochis
Part 1 looked at the basic exercise strategy for optionholders but underlined several exceptions to the rule. This article considers reasons and strategies for diversifying away from a concentrated position in your company's stock.

Stockbrokers' Secrets (Part 4): What I Tell My Best Clients About Down-Market Strategy This is premium content

W.E.B. Bantling
Market declines rattle even the most experienced stock option veterans (and their advisors). If you are less than fully prepared to cope with the emotional toll caused by an uncertain market, consider these 10 topics.

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How does a dividend affect the value of stock options, restricted stock, and restricted stock units? This is premium content


In theory, when a company pays a dividend, particularly a large special dividend, its stock value declines by...

Are qualified dividends included in the AMT calculation? This is premium content


Qualified dividends do receive special tax treatment when they are part of your net capital gain. The amount of AMT is capped by the...

Does the US have an exit tax? This is premium content


Yes, but whether it applies to you depends on your income and net worth. Effective from June 17, 2008, the Heroes Earning Assistance and Relief Tax Act of 2008 (HEART), which mostly gives benefits to members of the armed forces, includes a modification to the US exit tax (IRC Section 877A). If they meet certain conditions, US citizens...

NEW! My company is now granting restricted stock, and the current share price is much lower than I think it will be in a few years. Any tax-planning ideas? This is premium content


For restricted stock, you can make what the tax code calls a Section 83(b) election to be taxed immediately at grant instead of later at vesting, when your stock price, and thus your tax rate, may be much higher. However, before you make your decision, realize that...

Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise? This is premium content


No. Until you exercise a stock option, you do not have the rights of a...

I plan to exercise options for stock that pays dividends. Are there any exercise strategies or at least mistakes to avoid? This is premium content


To receive a dividend you must own a stock on the record date, so you want to be aware of the ex-dividend date. Also consider...

How are the dividends on restricted stock taxed and reported to me? This is premium content


Dividends that are earned on restricted stock are considered compensation income, which is reported on your W-2. The dividends can be "qualified dividends" and thus taxed at a lower rate when...

Do I receive dividends on unvested restricted stock and have voting rights? This is premium content


Although normally you cannot transfer them until vesting, shares of restricted stock are issued to you and are outstanding in your name from the time of grant. Most stock plans...

Do I get dividends with restricted stock units (RSUs)? How are they taxed? This is premium content


When a company pays dividends on outstanding shares of stock, it can choose...

I have various stock option grants with vested options. Do I need to exercise first my oldest grants or my oldest vested options?


There's no requirement for which vested options you must exercise first. The decision of which options to exercise first is part of your...

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Featured FAQs
NEW! My company is now granting restricted stock, and the current share price is much lower than I think it will be in a few years. Any tax-planning ideas? This is premium content
For restricted stock, you can make what the tax code calls a Section 83(b) election to be taxed immediately at grant instead of later at vesting, when your stock price, and thus your tax rate, may be much higher. However, before you make your decision, realize that...
Does the US have an exit tax? This is premium content
Yes, but whether it applies to you depends on your income and net worth. Effective from June 17, 2008, the Heroes Earning Assistance and Relief Tax Act of 2008 (HEART), which mostly gives benefits to members of the armed forces, includes a modification to the US exit tax (IRC Section 877A). If they meet certain conditions, US citizens...