Resources: Newsletter Archives
REPORT OF CONTENT ADDED,
UPDATED, REVISED, OR EXPANDED
July, August, and September 2007
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3rd QUARTER 2007: CONTENT ADDED, UPDATED, REVISED, OR EXPANDED |
 TAX CENTER
CONTENT TOPICS: Articles and FAQs
GLOBAL TAX GUIDE: Canada, France, India, Ireland, Israel, Spain, Switzerland, United Kingdom
GLOSSARY: New terms include dual-class shares, performance-based restricted stock, performance conditions, pillow talk, time-based stock award, and much more
ASK THE EXPERTS: Tax treatment at the exercise of pre-IPO stock options; expired stock options after death
Content with the  symbol requires Premium or Pro Membership at myStockOptions.com.
MSO Pro is our membership level for financial and wealth advisors. It lets you track and model stock grants for multiple clients, and provides online tools for communicating with clients.
The third quarter of 2007 kept our editorial team busy with many updates and additions to the award-winning content of myStockOptions.com.
New Articles On Retirement And Funding College With Stock Grants
Our content section Life Events continues to expand. During the past quarter we published the second and third articles in Troy Onink's series on using stock grants to pay for higher education. His three articles form the backbone of our new subsection College Funding in the section Life Events. In addition, our content on divorce, retirement, and retirement planning has been very active lately with additions and changes.
Year-End Planning
Our busiest time starts with the upcoming year-end period, followed (of course) by tax season. We have already updated our flagship year-end articles and FAQs for planning opportunities specific to 2007. On the website you can find this content in the section Financial Planning: Year-End Planning.
AMT Reform?
We are carefully watching the debate in Congress about reforming the alternative minimum tax (AMT), which is increasingly hitting middle-income taxpayers. See the FAQ where we track developments.
Have Your Say With Our Comments Feature
For over seven years, we have been writing about stock compensation; now you can have your say. Registered users can now contribute to our website by submitting comments at the end of each article. Want to add a fact or observation about the topic? Challenge a point we make? Suggest further reading? All of the above? Speak your mind and help our website continue to be the best online resource on stock compensation.
Explore Our Award-Winning Library Of Content
Below is a selection of content we added or revised during the third 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 that bears 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 or Pro 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
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?
How is fair market value determined for W-2 reporting of NQSO taxable income at exercise and for tax withholding?
If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?
Tax Center: Restricted Stock & RSUs
At death, do tax withholding and reporting apply to restricted stock if the vesting is accelerated or allowed to continue?
How does the taxation of restricted stock and restricted stock units differ?
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Basics: Core Concepts
How Does Your Company's Stock Plan Compare? (Part 1)
How Does Your Company's Stock Plan Compare? (Part 2)
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?
Basics: Vesting
Does the law mandate any minimum vesting schedule?
Any data on vesting schedules for restricted stock?
How does a call to active military duty affect stock grants?
Basics: Exercise
What methods may be used to exercise an option?
How is the income at exercise taxed?
Is my employer required by law to give me choices in how I exercise my options? What are the most common methods?
Can the exercise of stock options be an insider trading violation?
Basics: Alternatives
Which do companies grant more often: restricted stock or restricted stock units (RSUs)?
What advantages does restricted stock have over stock options?
What are the features of long-term performance awards, such as performance shares and units? What do surveys say the most commonly used metrics are?
Basics: Valuation & Expensing
What does it mean when someone says that employee stock options have both face (or intrinsic) value and time value?
Are there any examples and surveys that show how ESPPs are changing with mandatory expensing?
What do examples and surveys show about the effects mandatory expensing is having on my stock grants?
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NQSOs: Taxes Advanced
Stockbrokers' And Financial Planners' Year-End Secrets (Part 3): What We Tell Our Best Clients
Taking An Overseas Assignment: Stock Compensation For Mobile Employees
How is fair market value determined for W-2 reporting of NQSO taxable income at exercise and for tax withholding?
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?
If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?
What are "discounted stock options," and how are they taxed?
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ISOs: Taxes Advanced
Taking An Overseas Assignment: Stock Compensation For Mobile Employees
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?
If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?
ISOs: AMT
What is the alternative minimum tax? How likely is its reform?
ISOs: AMT Advanced
Stockbrokers' And Financial Planners' Year-End Secrets (Part 3): What We Tell Our Best Clients
When I hold ISO stock, how far must the stock price drop from the market price at exercise for AMT to exceed what my ordinary income tax would be if I sold the shares this year?
What ISO strategies can help minimize AMT liability?
At year-end, is there any general way to determine how many ISOs I can exercise and hold before triggering AMT?
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Employee Stock Purchase Plans (ESPPs) |
Employee Stock Purchase Plans: Rules
ESPPs And Your Financial Planning (Part 2)
When did ESPP expensing become mandatory, and how may my ESPP change?
Are there any examples and surveys that show how ESPPs are changing with mandatory expensing?
Employee Stock Purchase Plans: Taxes Advanced
ESPPs And Your Financial Planning (Part 2)
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Restricted Stock, Restricted Stock Units, & Performance Shares |
Restricted Stock: Basics
Which do companies grant more often: restricted stock or restricted stock units (RSUs)?
What advantages does restricted stock have over stock options?
Restricted Stock: Advanced
Taking An Overseas Assignment: Stock Compensation For Mobile Employees
Any data on vesting schedules for restricted stock?
Can my company set ownership guidelines or require me to retain a certain amount of company stock from a stock option exercise or a restricted stock grant?
If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?
What do examples and surveys show about the effects mandatory expensing is having on my stock grants?
What are the features of long-term performance awards, such as performance shares and units? What do surveys say the most commonly used metrics are?
Restricted Stock Units
Which do companies grant more often: restricted stock or restricted stock units (RSUs)?
How does the taxation of restricted stock and restricted stock units differ?
With restricted stock units, can I defer delivery of the shares at vesting?
Restricted Stock: Taxes
Are the tax rules for restricted stock different if I am an independent contractor, a consultant, or an outside director?
Restricted Stock: Taxes Advanced
At death, do tax withholding and reporting apply to restricted stock if the vesting is accelerated or allowed to continue?
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Stock Appreciation Rights (SARs) |
Stock Appreciation Rights: Basics
What are stock appreciation rights (SARs), and how are SARs taxed?
What do examples and surveys show about the effects mandatory expensing is having on my stock grants?
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 Advisors, Have You Heard About MSO Pro?
Made just for you, with tools to track and model grants for multiple clients, and proactive communications to build relationships. Click here for more information.
Financial Planning: Year-End Planning
Stockbrokers' And Financial Planners' Year-End Secrets (Part 3): What We Tell Our Best Clients
Ten Ideas For Year-End Stock Option Tax Planning
What are some year-end strategies for stock options, stock appreciation rights, and restricted stock?
When I hold ISO stock, how far must the stock price drop from the market price at exercise for AMT to exceed what my ordinary income tax would be if I sold the shares this year?
At year-end, is there any general way to determine how many ISOs I can exercise and hold before triggering AMT?
Financial Planning: Strategies
ESPPs And Your Financial Planning (Part 2)
I have vested stock options. What should I do: exercise and hold, exercise and immediately sell, or wait to exercise?
Financial Planning: Advanced Strategies
What ISO strategies can help minimize AMT liability?
Is there a way to defer taxation when I sell company stock?
Financial Planning: Diversification
Stockbrokers' Secrets (Part 5): What I Tell My Best Clients About Company Stock Diversification
How do I calculate whether my after-tax gains will be greater by investing my current option spread into a mutual fund or a diversified stock portfolio, as opposed to just waiting to exercise the options at the end of the term?
Financial Planning: High Net Worth
Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies
Taking An Overseas Assignment: Stock Compensation For Mobile Employees
Strategies For Hedging Concentrated Stock Positions (Part 3)
Techniques To Defer Or Reduce Taxes On The Sale Of Your Company's Shares (Part 1): QSB Stock
Can my company set ownership guidelines or require me to retain a certain amount of company stock from a stock option exercise or a restricted stock grant?
Financial Planning: Gifts
What is the tax treatment for gifts of company stock?
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Job Events: Job Search, Negotiation, & Hiring
Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies
Taking An Overseas Assignment: Stock Compensation For Mobile Employees
Job Events: Termination
How long do I have to exercise my vested stock options after my employment ends?
Job Events: Consultants & Contractors
Are the tax rules for restricted stock different if I am an independent contractor, a consultant, or an outside director?
Can a consultant use the proceeds from an NQSO exercise or restricted stock vesting to fund a Keogh or SEP?
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NEW! Life Events: College Funding
Funding Your Child's College Education With Stock Options And Other Stock Grants (Part 1)
Funding Your Child's College Education With Stock Options And Other Stock Grants (Part 2)
Funding Your Child's College Education With Stock Options And Other Stock Grants (Part 3)
To seek financial aid for my children's college tuition, I need to report my income and assets to the US Department of Education on the Free Application for Federal Student Aid (FAFSA). Should I list my stock grants? At what value?
What is the tax treatment for gifts of company stock?
Life Events: 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?
Do I pay any taxes when stock options are transferred to my former spouse as a part of my divorce settlement?
How are stock options and restricted stock valued in divorce?
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?
In a divorce agreement, how is my ESPP treated? Is transferring to my former spouse ESPP stock that has not met the holding period a disqualifying disposition?
Who pays taxes when restricted stock or vested company shares are transferred in a divorce settlement? How is restricted stock handled in divorce?
Life Events: Retirement
When should I start taking Social Security benefits?
Life Events: Retirement Plans
How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan?
Can a consultant use the proceeds from an NQSO exercise or restricted stock vesting to fund a Keogh or SEP?
Life Events: Death Taxes
At death, do tax withholding and reporting apply to restricted stock if the vesting is accelerated or allowed to continue?
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M&A Basics
What is a "lockup"?
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SEC Law & Rule 10b5-1 Trading Plans |
SEC Law: Basics
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?
SEC Law: Insider Trading
Can the exercise of stock options be an insider trading violation?
SEC Law: Rule 10b5-1 Trading Plans
Is it possible to violate insider-trading laws by terminating or modifying my Rule 10b5-1 trading plan when I know material nonpublic information?
What are best practices for Rule 10b5-1 trading plans?
SEC Law: Rule 144
Do the holding-period requirements under Rule 144 always apply to sales of company stock by affiliates and regular employees? Return to table of contents
Pre-IPO: Basics
Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies
Does the IRS have any rules on setting exercise prices?
Is my employer required to buy back my shares when I leave the company?
Pre-IPO: Early Exercise Options
I have early exercise options. If I leave my company before my options vest, or if it goes out of business, is my company required to repurchase my shares?
Pre-IPO: Going Public
Techniques To Defer Or Reduce Taxes On The Sale Of Your Company's Shares (Part 1): QSB Stock Return to table of contents
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GLOBAL TAX GUIDE |
UPDATED OR EXPANDED
Canada
France
India
Ireland
Israel
Spain
Switzerland
United Kingdom
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NEW!
dual-class shares
long-term unused minimum tax credit
performance-based restricted stock
performance conditions
pillow talk
service condition
time-based stock award
UPDATED OR EXPANDED
net unrealized appreciation (NUA)
performance stock options
Rule 701
springloading
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NEW!
I have about 70,000 vested incentive stock options (ISOs) in the stock of my previous company, which I just quit. The company's stock plan gives me a 90-day window to exercise these stock options before they expire. The options were given to me at two cents per share when I joined the company, and I am told the price is now 25 cents per share. I want to exercise all the stock options, as I feel that the company has the potential to be acquired or go public in the near future. What will be the tax impact when I exercise these options? I will just exercise, not sell, as the company is still private and not public.
My husband passed away two summers ago. I was not aware, and his company did not notify me, that he had stock options which were about to expire at the beginning of this year. Even if I had been aware, I did not have exercise rights, as his will was in probate and I was not approved as executrix until this summer. His company would not tell me any detailed information because I did not have a letter of testamentary. Is there any way to retrieve the lost money on the expired options?
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