Tax Center

Stock Option Financial Planning After Your Tax Return Is Filed And At Year-End (Part 1)

Tom Davison and Liam Hurley
UPDATED! The period just after the completion of your tax return is a great time to do your big-picture financial planning for 2010 and beyond. You can more accurately project your income and likely tax situation for the remainder of this year and the next, including AMT risk and capital-loss carry-forwards, to develop your strategy. At the end of the year, review your analysis and strategy again.

Stock Option Fundamentals (Part 4): NQSO Taxation

Marilyn Renninger
You're ready to delve deeper into how and when different taxes apply to NQSOs. You need to consider taxes at exercise and at sale to put together a strategy that maximizes the value of your options.

Global Tax Guide To Equity Compensation For International & Cross-Border Employees UPDATED!

The myStockOptions.com Tax Team
The Global Tax Guide explains the taxation of equity awards in 32 countries: stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights, and employee stock purchase plans. The country profiles are regularly reviewed and updated as needed. We do our best to keep the writing lively.

Decisions At Grant With Restricted Stock (Part 1): Tax Fundamentals

Tom Davison
Thanks to the IRS, with restricted stock you have to make decisions immediately at grant. Learn the rules that accompany this increasingly popular type of equity compensation.

Restricted Stock Taxation: What You Need To Know (Part 2)

Bruce Brumberg and Kate Victory
Along with stock options, your company has awarded you restricted stock. Restricted stock grants carry their own requirements and tax rules, which can significantly differ from those of stock options.

Fundamentals Of Employee Stock Purchase Plans (Part 3): Tax Treatment Of Your Purchases And Sales

Alisa Baker
Now let's look at the employee tax issues associated with employee stock purchase plans (ESPPs). ESPP tax rules can be more confusing and less logical than those that govern stock options.

Fundamentals Of Employee Stock Purchase Plans (Part 4): Down Markets And Other Tax Topics

Alisa Baker
In Part 4 we consider the taxation of employee stock purchase plans (ESPPs) that are not qualified under Section 423, and the tax issues of down markets, death, and withholding.

Decisions At Grant With Restricted Stock (Part 2): The 83(b) Election Risks

Tom Davison
Part 1 examined the basic facts of restricted stock and the decisions you need to make at grant. Part 2 explains the risks of the 83(b) election, which lets you choose to be taxed at grant rather than vesting.

Avoid Tax Return Mistakes With Stock Options & ESPPs: What You Need To Know In 2010

Bruce Brumberg and Lynnette Khalfani
Tax returns can be onerous. Read this article if you are puzzled by Form 1099-B or don't know how and where to report sales of company stock from options or employee stock purchase plans.

How To Report Sales Of Company Stock

The myStockOptions.com Tax Team
UPDATED FOR 2010! Learn how to report your sales of company stock on Schedule D of IRS Form 1040. Our comprehensive guide to Schedule D reporting covers sales of stock from nonqualified stock options, incentive stock options, restricted stock, restricted stock units, performance shares, employee stock purchase plans, and stock appreciation rights.

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Schedule D diagram! How are capital gains taxed when I sell my NQSO shares?

If you hold stock acquired from the exercise of an NQSO for more than one year, the appreciation is...

Schedule D diagram! How do I report a sale of NQSO shares on my federal income-tax return?

You need to complete a Schedule D, Capital Gains and Losses, for the year of the sale of your stock and...

Schedule D diagram! I did a cashless exercise with my nonqualified stock options last year. Do I need to show the transaction on Schedule D of my Form 1040 tax return, or can I ignore the broker's statement (1099-B) since there are no gains or losses to report?

You should still file Schedule D, which is used to report capital gains and losses...

Schedule D diagram! How do I report a sale of shares in a sell-to-cover exercise?

When you do a sell-to-cover exercise and sell just enough shares to cover the exercise cost, the brokerage commission, and the taxes, you report only...

Schedule D diagram! If I did cashless exercises/sales of stock options from several grants simultaneously, do I need to report each sale separately on Schedule D? Can I aggregate them in one line because I exercised and sold the stock on the same day?

Though each grant adds a different amount of money to your taxable ordinary income, the tax basis of all the shares is...

Schedule D diagram! I exercised NQSOs, held the stock, and now have long-term capital gains on the sale. Do I get any "credit" on my tax return for the income tax I paid for the spread at exercise?

This differs from the situation with ISOs in which your exercise-and-hold triggers AMT and you then have a tax credit...

Schedule D diagram! Is the brokerage commission taxed?

No. It reduces the sale proceeds you report on...

Schedule D diagram! I did a cashless exercise with my incentive stock options. Should I still report it on Schedule D even though the gain is zero? And what about any alternative minimum tax?

By selling the ISO stock at the same time you exercised it, you eliminated the AMT. The same would be true if you had sold the stock at...

Schedule D diagram! I exercised my ISOs and sold the ISO stock later in the same year. How is this reported on my tax return when the stock price at sale is higher or lower than at exercise?

If you sold the stock at a price higher than it was on the day of your exercise, the spread at exercise is still...

Schedule D diagram! After I satisfy the ISO holding periods, how do I report a sale on my tax return?

After you have held the stock more than two years from grant and one year from exercise, the spread between the sales and exercise prices is...

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