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Year-End Strategies For Employee Stock Purchase Plans: Ideas To Consider This is premium content

Matt Simon
UPDATES! When you think about year-end financial and tax planning, don't forget to review shares acquired through an employee stock purchase plan. This article outlines issues and strategies to contemplate.

Six ESPP Essentials (Part 2): Holding Periods, Tax Treatment, Major Corporate Or Personal Events This is premium content

Matt Simon
Your company's employee stock purchase plan (ESPP) can be a strong financial benefit, but the rules and taxation can be tricky. Part 2 delves into the complicated topics of holding periods, tax treatment, and the impact of various life events on your ESPP participation and holdings.

ESPP Choices: Flip Or Hold? (Part 1) This is premium content

Timothy A. Farmer and Gregory G. Geisler
After you decide to participate in your company's employee stock purchase plan, your next decision is whether to sell the stock soon after purchase or to hold it (and for how long). This article series examines different ways to participate in your ESPP according to relative risk tolerance, timeframe, and needs for money.

ESPP Choices: Flip Or Hold? (Part 2) This is premium content

Timothy A. Farmer and Gregory G. Geisler
You can build your employee stock purchase plan into your long-range savings and retirement strategy. This article compares buying company stock at a discount through your ESPP to putting the same money into your 401(k) or another retirement plan.

Employee Stock Purchase Plans & Your Financial Planning (Part 1) This is premium content

Bruce Brumberg
Employee stock purchase plans (ESPPs) are popular and prevalent at most public companies. However, the structure of these plans is changing. These modifications may affect your decision to participate in your ESPP and its place in your financial planning.

Employee Stock Purchase Plans & Your Financial Planning (Part 2) This is premium content

Bruce Brumberg
Employee stock purchase plans (ESPPs) are changing in many ways, largely in response to accounting rules. For Part 2, myStockOptions.com asked financial and wealth advisors what they are recommending to clients about ESPP participation.

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What are the top 10 questions I should ask about my company's employee stock purchase plan?

Employee stock purchase plans (ESPPs) can be designed in different ways and provided with various features that make them appealing to participants. Before you enroll in your company's ESPP, however, you should be sure to know the answers to the following questions...

Will I receive information statements from my company about ESPP purchases or option exercises? Will I receive Form 3922 or Form 3921? This is premium content

Companies make some information available voluntarily, while the reporting of other information is mandatory. Section 6039(a) of the Internal Revenue Code requires companies to send an information statement to employees who have exercised incentive stock options or have made purchases in a tax-qualified Section 423 employee stock purchase plan. ISO exercises are reported on IRS Form 3921. ESPP purchases are reported on IRS Form 3922...

Can my ESPP go underwater or be affected in other ways by a down market? This is premium content

Employee stock purchase plans cannot be "underwater" in the traditional sense of having a purchase price greater than the current stock price. Down markets can create special opportunities and unique issues for ESPPs. For example, with an ESPP...

When did ESPP expensing become mandatory, and how may my ESPP change? This is premium content

Mandatory expensing started on January 1, 2006. Companies must recognize an earnings charge unless their ESPPs fit into the discount safe harbor rule. This has led companies to re-examine features of their ESPPs, including...

Do surveys show how employee stock purchase plans are changing with mandatory expensing and other developments? This is premium content

Companies are taking various approaches to modifying the features of their ESPPs: reducing the discount, shortening the lookback period, or even...

My company's 12-month offering period contains two six-month purchase periods. If I enroll after the start, at the beginning of the second purchase period, what is my lookback offering price? This is premium content

It is the price at the start of the purchase period in which you begin to participate...

In a down market, why does my ESPP automatically withdraw and re-enroll me in a new offering period? This is premium content

Some plans are designed to start a new offering period every...

How will my broker know which shares to sell? Should I identify them in some way? This is premium content

If you have more than one batch of company stock, you are responsible for providing your broker with enough information to identify which shares to sell. If you do not specify...

How does the company know I've sold my shares? This is premium content

Companies use various methods to track your stock sales. These methods include...

How common is it for an ESPP to have a mandatory holding period for purchased stock? This is premium content

Although the practice is somewhat uncommon, your company may have a required holding period after purchase to encourage share ownership and prevent the flipping of the stock. As for the tax treatment, this does...

Can I name a beneficiary for my stock options, ESPPs, stock appreciation rights, or restricted stock? This is premium content

You should read the terms of your stock plan and grant agreement. If the plan allows transfer upon death to beneficiaries, you should obtain the...

If I die, what will happen to my ESPP participation and the holding period rules? This is premium content

If your employment ends, most Section 423 ESPPs automatically...

Does participating in an ESPP affect my ability to contribute to a 401(k) plan or IRA? This is premium content

ESPPs are not tax-qualified retirement plans or profit-sharing plans, so participating in an ESPP has...

Can my company use the IPO price as the ESPP grant date price? This is premium content

If an IPO company wants to lock in the IPO price as the initial grant date price, it can do so for the initial offering period of up to 27 months...

Can a purchase of shares through an ESPP ever be considered insider trading? This is premium content

Generally, there is no violation for the enrollment at the start of the offering period or for the...

Are there any securities-law restrictions on my sale of ESPP stock? This is premium content

Federal and state securities laws may restrict...

Do blackout or lockdown periods exist for stock plans? Are there periods during which you can't exercise options or buy stock in an ESPP? This is premium content

The popular media sometimes confuse the term "blackout" with "lockdown." For stock plans, these terms apply to different...

Can a senior executive or board member participate in an ESPP? This is premium content

To be tax-qualified under Section 423 of the Internal Revenue Code, ESPPs must follow certain eligibility rules and restrictions...

I am an officer in my company and want to participate in our ESPP. Do Section 16 reporting and liability for short-swing profits raise any special concerns with an ESPP? This is premium content

If your company's ESPP is qualified under Section 423 of the Internal Revenue Code, the Section 16 ramifications of participating in the plan are not as...

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