Resources: Newsletter Archives
REPORT OF CONTENT ADDED,
UPDATED, REVISED, OR EXPANDED
October, November, and December 2007
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4th QUARTER 2007: CONTENT ADDED, UPDATED, REVISED, OR EXPANDED |
 TAX CENTER: Annotated examples of IRS Form W-2 and Schedule D for reporting company stock sales
CONTENT TOPICS: Articles and FAQs
GLOBAL TAX GUIDE: UK capital gains tax rate may change in 2008; plus, tax news from China, France, Germany, India, and many other countries
GLOSSARY: New terms include deferred stock bonus, refundable credit, tax equalization, and more
ASK THE EXPERTS: Does the law provide a standard length of time after resignation for exercising vested stock options?
MSO Pro is our new membership level for financial and wealth advisors. Content with the  symbol requires Premium or Pro Membership at myStockOptions.com.
The fourth quarter of 2007 kept our editorial team busy with many updates and additions to the award-winning content of myStockOptions.com.
 We are also adding podcasts to our website, giving you yet another way to learn about equity compensation. These succinct, professionally produced recordings are available both by streaming media you can listen to on your computer and as MP3 files you can download and save to an MP3 player. Our first podcast (7 min.) is on the basics of stock options. Others will follow on many topics, both basic and advanced.
Prevent Tax Mistakes
Now that the time for year-end planning is over, the tax season beckons. Our articles and FAQs on W-2s and tax returns can educate you and help prevent mistakes in the tax reporting for stock options, restricted stock and RSUs, performance shares, stock appreciation rights, and employee stock purchase plans. You will find all of this content in the Tax Center, where the special section Reporting Company Stock Sales has annotated examples that show you how to report sales of stock on Schedule D of Form 1040.
The Latest On The Alternative Minimum Tax (AMT)
After a political tug-of-war during the fall, Congress passed the long-awaited AMT patch for 2007 in December: the Tax Increase Prevention Act of 2007 (HR 3996), which extends and slightly increases the AMT income exemption amounts of 2006. The amounts for the tax year 2007 are $44,350 for single filers, $66,250 for married couples who file jointly, and $33,125 for married people who file singly. You can read about AMT news, and the prospects for AMT reform, in the FAQ that covers these developments, which you will find in our content sections on the alternative minimum tax.
Also in December: the Tax Technical Corrections Act of 2007 (see page 4 of the report by the House of Representatives) modified the new route for claiming AMT credits that was adopted a year earlier. In keeping with our commitment to publishing timely content, we turned quickly on this fresh development to update our relevant AMT content.
From Our Global Tax Guide: UK Capital Gains Rate May Change In 2008
In October, HM Treasury proposed a new 18% flat rate of capital gains tax. Under current British tax law, a system called "taper relief" provides a capital gains rate of either 40%, 20%, or 10% at the sale of assets. The rate depends on the type of asset and the length of ownership: gains from the sale of company shares held for at least two years are taxed at the lowest rate of 10%. Under the proposed tax law, these shares would be taxed at 18% from April 6, 2008. However, the proposal may change between now and April. To get the latest tax news from the UK and 28 other countries, visit our Global Tax Guide.
Explore Our Award-Winning Resources
Below is a selection of content we added or revised during the fourth quarter of 2007. Click on any of the section headings: the link will take you to the relevant topic area of the website. To view the content of any title with the logo, you must be a Premium or Pro Member of myStockOptions.com.
Please contact us at 617-734-1979 or sales@mystockoptions.com if you would like to receive more information on licensing our content and/or tools, on our custom websites for companies, and on our bulk Premium Memberships to our public site. Meanwhile, please consider the benefits of an individual subscription, and see who becomes a Premium Member of myStockOptions.com.
—Bruce Brumberg, Editor-in-Chief
Tax Center: Stock Options & SARs
Avoid Costly Tax Return Mistakes And Maximize Your Profits: What Optionholders Need To Know
NQSOs: Tax Return Tips And Traps
ISOs: Tax Return Tips And Traps
W-2 diagram! What will my W-2 show after I exercise nonqualified stock options?
W-2 diagram! What will my W-2 show after I exercise stock appreciation rights?
Schedule D diagrams! How do I report sales of NQSO stock?
Schedule D diagrams! How do I report sales of ISO stock?
Schedule D diagrams! How do I report sales of SAR stock?
What is the alternative minimum tax (AMT)? What is the latest news about AMT reform in Congress?
In general, how does the alternative minimum tax (AMT) calculation work?
Do I get a tax credit if I paid AMT when I exercised an ISO? How does it work, and did the tax law of December 2006 change this?
Refundable AMT Credit (Part 1): Different Rules For Old Unused Credit
Refundable AMT Credit (Part 2): The Calculation
I acquired stock from option exercises and restricted stock vesting a few years ago. When I sell the stock, how do I rediscover the cost basis for Schedule D of my tax return?
Stock Option Fundamentals (Part 5): Incentive Stock Option Taxation & Alternative Minimum Tax
Are there any strategies for paying estimated taxes on income from stock options and restricted stock?
Will I receive any mandatory information statement from my company about exercises, purchases, and sales related to my stock options and/or employee stock purchase plan?
Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?
Tax Center: Restricted Stock, RSUs, & Performance Shares
W-2 diagram! What is included in my W-2 in connection with a restricted stock grant?
W-2 diagram! What is included in my W-2 in connection with a grant of restricted stock units?
Schedule D diagrams! How do I report restricted stock and RSU sales?
Schedule D diagram! How do I report sales of performance shares?
Are there any strategies for paying estimated taxes on income from stock options and restricted stock?
Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?
Tax Center: ESPPs
Schedule D diagram! How do I report sales of ESPP stock?
Will I receive any mandatory information statement from my company about exercises, purchases, and sales related to my stock options and/or employee stock purchase plan?
Tax Center: Tax Cuts 2003–2006
Refundable AMT Credit (Part 1): Different Rules For Old Unused Credit
Refundable AMT Credit (Part 2): The Calculation
Did the tax laws of May 2003 and May and December 2006 change the taxation of incentive stock options? Did it, for example, remove the exercise spread from the calculation of alternative minimum tax?
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Basics: Core Concepts
How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan?
Basics: Grants
Does the IRS have any rules on setting exercise prices?
Can a grant of stock options be an insider trading violation?
What is a "reload" or "restoration" option? How common are they in stock plans?
Basics: Exercise
If the stock I receive at exercise is not registered with the SEC and I cannot sell it, is the date for determining the taxes delayed?
Basics: Sales
What happens if I have a capital gain from one sale of company stock and a capital loss from another sale of company stock or another security?
Can I sell my company stock through a blind trust as a defense against insider trading?
What is a "wash sale"?
Basics: Alternatives
What are "discounted" stock options, and how are they taxed?
Basics: Underwater Options
If my company offers me an option exchange or reprices my underwater options, will there be any tax impact on me? What factors should I consider in accepting the exchange?
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NQSOs: Taxes Advanced
W-2 diagram! What will my W-2 show after I exercise nonqualified stock options?
Schedule D diagrams! How do I report sales of NQSO stock?
I acquired stock from option exercises and restricted stock vesting a few years ago. When I sell the stock, how do I rediscover the cost basis for Schedule D of my tax return?
What happens if I have a capital gain from one sale of company stock and a capital loss from another sale of company stock or another security?
What happens if I live in state A when my stock options are granted, state B when I perform some of my services, state C when I exercise the options, and state D when I sell the shares?
My company backdated more stock options than just those of the senior executives. How does this affect employees like me and the taxation of my stock grants?
Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?
What are "discounted" stock options, and how are they taxed?
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ISOs: Basics
Will I receive any mandatory information statement from my company about exercises, purchases, and sales related to my stock options and/or employee stock purchase plan?
ISOs: Taxes
What happens if I have a capital gain from one sale of company stock and a capital loss from another sale of company stock or another security?
ISOs: Taxes Advanced
Schedule D diagrams! How do I report sales of ISO stock?
I acquired stock from option exercises and restricted stock vesting a few years ago. When I sell the stock, how do I rediscover the cost basis for Schedule D of my tax return?
What happens if I live in state A when my stock options are granted, state B when I perform some of my services, state C when I exercise the options, and state D when I sell the shares?
Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?
My company backdated more stock options than just those of the senior executives. How does this affect employees like me and the taxation of my stock grants?
ISOs: Alternative Minimum Tax (AMT)
Stock Option Fundamentals (Part 5): Incentive Stock Option Taxation & Alternative Minimum Tax
What is the alternative minimum tax (AMT)? What is the latest news about AMT reform in Congress?
In general, how does the alternative minimum tax (AMT) calculation work?
Do I get a tax credit if I paid AMT when I exercised an ISO? How does it work, and did the tax law of December 2006 change this?
ISOs: AMT Advanced
Refundable AMT Credit (Part 1): Different Rules For Old Unused Credit
Refundable AMT Credit (Part 2): The Calculation
I have large unused AMT credits. Do the tax laws of December 2006 and December 2007 help me use them quicker?
At year-end, is there any general way to determine how many ISOs I can exercise and hold before triggering AMT?
Did the tax laws of May 2003 and May and December 2006 change the taxation of incentive stock options? Did it, for example, remove the exercise spread from the calculation of alternative minimum tax?
I know that my ISO exercises will trigger the AMT for me this year or next. What planning strategies should I use that are related to other tax payments and income?
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Employee Stock Purchase Plans (ESPPs) |
Employee Stock Purchase Plans: Basics
Schedule D diagram! How do I report sales of ESPP stock?
Employee Stock Purchase Plans: Rules
Will I receive any mandatory information statement from my company about exercises, purchases, and sales related to my stock options and/or employee stock purchase plan?
Employee Stock Purchase Plans: Taxes Advanced
I acquired stock from option exercises and restricted stock vesting a few years ago. When I sell the stock, how do I rediscover the cost basis for Schedule D of my tax return?
What is a "wash sale"?
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Restricted Stock & Restricted Stock Units |
Restricted Stock: Advanced
I acquired stock from option exercises and restricted stock vesting a few years ago. When I sell the stock, how do I rediscover the cost basis for Schedule D of my tax return?
Restricted Stock Units
W-2 diagram! What is included in my W-2 in connection with a grant of restricted stock units?
Schedule D diagram! How do I report any gain that results from the sale of my restricted stock units (RSUs) on my federal income-tax return?
Performance Shares
Schedule D diagram! How do I report any gain that results from the sale of my performance shares on my federal income-tax return?
Restricted Stock: Taxes
Schedule D diagrams! How do I report restricted stock and RSU sales?
W-2 diagram! What is included in my W-2 in connection with a restricted stock grant?
W-2 diagram! What is included in my W-2 in connection with a grant of restricted stock units?
Are the tax rules for restricted stock different if I am an independent contractor, a consultant, or an outside director?
Restricted Stock: Taxes Advanced
What happens if I live in state A when my restricted stock is granted, in state B when part of it vests, in state C when the rest of it vests, and in state D when I sell my shares?
The value of my restricted stock has fallen since vesting. Should I sell my shares at year-end to get a credit for the income tax I paid at vesting, or to net the loss against capital gains?
Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?
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Stock Appreciation Rights (SARs) |
Stock Appreciation Rights: Taxes
Schedule D diagrams! How do I report sales of SAR stock?
I acquired stock from option exercises and restricted stock vesting a few years ago. When I sell the stock, how do I rediscover the cost basis for Schedule D of my tax return?
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Financial Planning: Strategies
Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation
Financial Planning: Advanced Strategies
Retirement Planning With Your Stock Options And Other Stock Compensation (Part 3: Post-Retirement Planning)
I know that my ISO exercises will trigger the AMT for me this year or next. What planning strategies should I use that are related to other tax payments and income?
Financial Planning: Diversification
Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation
Financial Planning: High Net Worth
Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies
Can I sell my company stock through a blind trust as a defense against insider trading?
What is a "reload" or "restoration" option? How common are they in stock plans?
If I must disgorge short-swing profits under Section 16(b), do I still have to pay tax on those profits? Do I get a tax deduction for the disgorgement?
Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?
Financial Planning: Gifts
What is the tax treatment for gifts of company stock?
Financial Planning: Year-End Planning
Refundable AMT Credit (Part 1): Different Rules For Old Unused Credit
Refundable AMT Credit (Part 2): The Calculation
What are some year-end strategies for stock options, stock appreciation rights, and restricted stock?
At year-end, is there any general way to determine how many ISOs I can exercise and hold before triggering AMT?
The value of my restricted stock has fallen since vesting. Should I sell my shares at year-end to get a credit for the income tax I paid at vesting, or to net the loss against capital gains?
I know that my ISO exercises will trigger the AMT for me this year or next. What planning strategies should I use that are related to other tax payments and income?
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Job Events: Job Search & Negotiation
Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies
How common are clawback provisions?
Job Events: Consultants & Contractors
Are the tax rules for restricted stock different if I am an independent contractor, a consultant, or an outside director?
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Life Events: Divorce
How are stock options and restricted stock valued in divorce?
How are ISOs usually handled in divorce?
After stock options are transferred to my former spouse in divorce, who pays the taxes at exercise? How does my company withhold and report the taxes?
Instead of transferring stock options to my ex-spouse in the divorce property settlement, can I assign the economic benefits of her/his portion with the right to designate exercise?
Life Events: Retirement
Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation
Retirement Planning With Your Stock Options And Other Stock Compensation (Part 3: Post-Retirement Planning)
Life Events: Retirement Plans
Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation
How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan?
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M&A Taxes
One year after the acquisition, under the deal's terms I was granted additional shares in an earnout for my company's meeting of performance targets. How are these additional shares taxed?
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SEC Law & Rule 10b5-1 Trading Plans |
SEC Law: Basics
If the stock I receive at exercise is not registered with the SEC and I cannot sell it, is the date for determining the taxes delayed?
SEC Law: Insider Trading
Can a grant of stock options be an insider trading violation?
Can I sell my company stock through a blind trust as a defense against insider trading?
SEC Law: Rule 10b5-1 Trading Plans
How widely used are Rule 10b5-1 trading plans? Is information about their use available?
Is it possible to violate insider-trading laws by terminating or modifying my Rule 10b5-1 trading plan when I know material nonpublic information?
SEC Law: Rule 144
How soon after an IPO can I sell my stock under Rule 144?
What are the requirements that an affiliate (i.e., an executive or director) must follow to sell stock to the public under Rule 144?
Do the holding-period requirements under Rule 144 always apply to sales of company stock by affiliates and regular employees?
SEC Law: Section 16
If I must disgorge short-swing profits under Section 16(b), do I still have to pay tax on those profits? Do I get a tax deduction for the disgorgement?
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Pre-IPO: Basics
Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies
Does the IRS have any rules on setting exercise prices?
After the IPO, are there any restrictions on when I can sell shares of my company stock?
If the stock I receive at exercise is not registered with the SEC and I cannot sell it, is the date for determining the taxes delayed?
Pre-IPO: Going Public
How soon after an IPO can I sell my stock under Rule 144?
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GLOBAL TAX GUIDE |
UPDATED OR EXPANDED
Canada
China
France
Germany
India
Ireland
New Zealand
United Kingdom
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NEW!
deferred stock bonus
refundable credit
release date
retirement-eligible age
tax equalization
tender of shares
UPDATED OR EXPANDED
capital gain (and loss)
face value
income in respect of a decedent (IRD)
leave of absence
long-term unused minimum tax credit
overhang
post-termination exercise period
run rate
total value
W-2
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NEW!
I recently left a company and have vested stock options I can exercise for 82,000 shares, divided between incentive stock options (ISOs) and nonqualified stock options (NQSOs). I know that I forfeited my unvested restricted stock when I left. However, my paperwork doesn't give a timeframe in which I can exercise stock options after I leave the company. Is there a commonly used length of time or a period required by law, such as 30 or 60 days after resignation?
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