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SARs

Annotated diagram of Schedule DTax 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.


SARs

Learn about stock appreciation rights (commonly abbreviated SARs), which are functionally similar to nonqualified stock options in many ways.

Browse an overview of this section below, or explore the subtopics to the left. See also the stock appreciation rights section of the Tax Center.

Selected Articles

Basics

Stock Appreciation Rights 101 (Part 1)

Stock appreciation rights (SARs) are being granted by some companies. To help you understand SARs, Part 1 explains the "appreciation," the role of exercises, and taxes at exercise.
Taxes

Stock Appreciation Rights 101 (Part 2) This is premium content

Stock appreciation rights (SARs) are garnering interest among companies. Part 2 discusses taxes, IRS concerns, and why companies like SARs.
Taxes

NEW! Living And Working In Multiple States: Challenges For Mobile Employees In The USA This is premium content

Podcast included! Moving between US states, whether to relocate permanently, travel for business, or retire, can involve tax complications for people who have stock compensation. This article presents the tax issues that you may encounter when you leave your home office and cross a state line.
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Taxes

Form 8949 and Sch. D diagrams! How To Report Sales Of Company Stock On Your Tax Return

If you sold in 2016 any shares that you acquired from equity compensation or an ESPP, you will need to report the sale on the federal tax return that you file in 2017. Learn here what you must know to avoid expensive mistakes and unwanted IRS attention. Our annotated diagrams of Form 8949 and Schedule D can help you make sense of the reporting rules.
Taxes

VIDEO! Tax-Return Forms And Reporting Rules For Stock Sales

Learn how to prevent costly tax return mistakes with this animated presentation on IRS Form 1099-B, IRS Form 8949, and Schedule D.
Taxes

VIDEO! Tax-Return Reporting Of Company Stock Sales: How To Avoid Overpaying Taxes

Learn the rules for reporting stock sales on your tax return, along with costly errors to avoid if the shares you sold came from stock options, restricted stock/RSUs, stock appreciation rights, or an employee stock purchase plan. Among other issues, you must understand your "cost basis" to avoid overpaying your taxes. Running time: 8:05.
This is simply a selection of the many articles in this section.
Use the navigation to the left to explore all of the categories in this section.

Selected FAQs

Basics

What are stock appreciation rights?

SARs, or stock appreciation rights, are contractual rights that entitle you to receive the appreciation from a corresponding number of company shares after the grant date. Instead of exercising a stock option, you...
Basics

What are the top 10 questions I should ask about my stock appreciation rights? This is premium content

You should know the answers to the following questions. Understanding the topics involved will help you make the most of your stock appreciation rights (SARs) and prevent costly mistakes...
Taxes

How are stock appreciation rights taxed? This is premium content

When you you exercise stock appreciation rights, depending on the plan's design and practices, you receive...
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Taxes

When I exercise my stock appreciation rights (SARs), will the amount of tax withheld cover the amount of tax that I must pay when I file my return? This is premium content

Employers usually withhold federal income taxes at the flat rate required for supplemental wages, which is...
Taxes

If I exercise stock appreciation rights (SARs), will I need to make estimated tax payments? This is premium content

At a minimum, at the time of your SARs exercise your company will withhold taxes from the proceeds at the required federal withholding rate for supplemental income. However, depending on your income, this minimum withholding may not be enough. If so, you will need to...
Basics

Does all the stock option content on this website also apply to stock appreciation rights (SARs)?

Much of the stock option content is relevant to SARs. All the key stock option features...
Basics

Why are some companies considering stock appreciation rights (SARs) as an alternative to stock options? This is premium content

ASC Topic 718, formerly called FAS 123(R), requires the expensing of...
Taxes

What are the biggest mistakes related to stock appreciation rights (SARs) that I can make on my tax return, and how can I avoid them? This is premium content

It is all too easy to make costly tax-return errors that attract unwanted IRS attention. Learn how to prevent mistakes...
Taxes

W-2 diagram What will my W-2 show after I exercise stock appreciation rights? This is premium content

The gain from your SARs exercise(s) is totaled on the W-2 with other income in the following boxes...
This is simply a selection of the many FAQs in this section.
Use the navigation to the left to explore all of the categories in this section.