Christopher Cline
The charitable remainder trust (CRT) is a mainstay of estate planning. Although designed for charitable giving, CRTs can play a role in financial planning for your stock grants.
Christopher Cline and Joshua Husbands
Restrictions can apply when you are funding a CRT with your company stock. These considerations dictate whether your strategy makes sense or is even possible.
Christopher Cline and Joshua Husbands
In this article we discuss the use of CRTs to diversify your company stock holdings, without immediate income tax liability, while you support an institution or cause you believe in.
Raymond Fazzi
Financial Advisor
Financial advisors are telling clients not to expect estate tax to disappear. The drafting of wills and estate plans has changed in ways that are more subtle than dramatic. (Although not specific to stock compensation, this article is of interest to anyone with substantial net worth in company stock and options.)
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Stock options that you hold when you die can be taxed twice...
Unvested options are not taxed or included in your estate. The value of any vested but unexercised stock options would be...
There is a choice. On the date of death, shares of publicly traded companies are generally...
For federal income tax purposes, your estate or beneficiaries will receive a "step-up" in the tax basis of the shares to the market value of the stock at the time of death...
When options are exercised, generally the estate or beneficiary is able to take an income tax deduction for the amount of estate taxes already paid by the estate. But when they are not exercised you cannot take the deduction against other income...
The spread at exercise is taxable to the estate or beneficiary at ordinary income tax rates...
Your estate or beneficiary must recognize capital gain equal to the difference between the sales price and the fair market value (FMV) of the stock...
When the estate or beneficiary exercises the option, it triggers ordinary income. Whether it is W-2 income and taxes are withheld, or whether it is 1099 income, depends on...
Under the tax code (IRC Section 691(a)(3)), the decedent's income now controlled by the recipient retains the same tax character that it would have had if...
Yes. Under the Internal Revenue Code, you must exercise an ISO within...
ISOs are treated more favorably then NQSOs. For estate-tax purposes it's the same, but at...
Some experts take the position that an AMT credit transfer, at least in a community property state...
The tax treatment of sales by your estate depends on whether you or the estate purchased the shares. Death is considered a qualifying disposition of the shares, regardless of how long you have held the shares. If you purchase the stock but die before its disposition, you have...
Typically, all or a
pro rata portion of any restricted stock vests at death. The value of restricted stock that vests and is payable at your death will...
The acceleration and vesting trigger ordinary income. Whether this is W-2 income and taxes are withheld, or whether it is 1099 income, depends on...
Assuming your stock plan allows this and it did not allow you to name a beneficiary, transferring unexercised vested options to a living trust would...
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Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
