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Switzerland Taiwan United Kingdom United States Venezuela Newsletters Tax Changes & More Ahead: Updates At myStockOptions.com REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED: October, November, and December 2008 Year-End Planning: myStockOptions.com Update No. 36 Alert: Tax Law Changes, Market Volatility, & Underwater Options REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED: July, August, and September 2008 Market Volatility & Underwater Stock Options: myStockOptions.com Update No. 35 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - April, May, and June 2008 Restricted Stock & RSUs: myStockOptions.com Update No. 34 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - January, February, and March 2008 Tax Alert: Stock Compensation Affects Your Tax Rebate REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - October, November, and December 2007 Year-End Strategies For Stock Options & Restricted Stock: myStockOptions.com Update No. 33 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - July, August, and September 2007 College Funding With Stock Compensation: myStockOptions.com Update No. 32 Tax Alert: IRS Still Seriously Looking For Backdated Stock Options REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - April, May, and June 2007 Retirement Planning: myStockOptions.com Update No. 31 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - January, February, and March 2007 Alert: SEC "Looking At" Rule 10b5-1 Trading Plans Tax Returns: myStockOptions.com Update No. 30 Tax Alert: IRS Confirms Taxes Owed For Backdated Stock Options REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - October, November, and December 2006 AMT Credits With ISOs: New Tax Law Changes Rules Year-End Strategies For Stock Options & Restricted Stock: myStockOptions.com Update No. 29 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - July, August, and September 2006 Employee Stock Purchase Plans (ESPPs): myStockOptions.com Update No. 28 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - April, May, and June 2006 Restricted Stock & Restricted Stock Units (RSUs): myStockOptions.com Update No. 27 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - January, February, and March 2006 Tax Returns: myStockOptions.com Update No. 26 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - October, November, and December 2005 Year-End Planning: myStockOptions.com Update No. 25 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - July, August, and September 2005 ESPPs: myStockOptions.com Update No. 24 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - April, May, and June 2005 Stock Appreciation Rights (SARs): myStockOptions.com Update No. 23 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - January, February, and March 2005 Tax Returns: myStockOptions.com Update No. 22 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - October, November, and December 2004 Year-End Planning: myStockOptions.com Update No. 21 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - July, August, and September 2004 Final IRS Regulations On ISOs REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - April, May, and June 2004 Restricted Stock & RSUs: myStockOptions.com Update No. 20 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - January, February, and March 2004 Tax Returns: myStockOptions.com Update No. 19 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - October, November, and December 2003 myStockOptions.com Update No. 18 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - July, August, and September 2003 myStockOptions.com Update No. 17 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - April, May, and June 2003 myStockOptions.com Update No. 16 REPORT OF CONTENT ADDED, UPDATED, REVISED, OR EXPANDED - January, February, and March 2003 myStockOptions.com Update #15 myStockOptions.com Update #14 myStockOptions.com Update #13 myStockOptions.com Update #12 myStockOptions.com Update #11 myStockOptions.com Update #10 myStockOptions.com Update #9 myStockOptions.com Update #8 myStockOptions.com Update #7 myStockOptions.com Update #6 myStockOptions.com Update #5 myStockOptions.com Update #4 myStockOptions.com Update #3 myStockOptions.com Special Election Update myStockOptions.com Update #2 myStockOptions.com Update #1

Articles and FAQs Basics     Basics: Core Concepts How To Avoid The Most Common Stock Option Mistakes (Part 1)  How To Avoid The Most Common Stock Option Mistakes (Part 2)  Stock Option Fundamentals (Part 1): Know Your Goals And Terms  Stock Option Terms: What You Can Expect  How Does Your Company's Stock Plan Compare? (Part 1)  How Does Your Company's Stock Plan Compare? (Part 2)  What Are My Stock Options Worth?  Stockbrokers' Secrets (Part 1): What I Tell My Best Clients About Stock Option Strategy  Stock-Option Basics Sunk By Options What is a stock option?  What is restricted stock? Does it differ from restricted securities?  Why do companies grant stock options and other equity awards? How many people have them?  NEW! Can limited liability companies make stock grants?  UPDATED! Why doesn't my employer offer me stock options or another type of equity compensation?  Are there any limitations on my company's discretion in granting stock options and/or restricted stock?  What is a stock plan?  What are the important documents I need to understand a stock plan?  Are different types of stock options granted by employers?  How common are stock options, restricted stock, and performance shares outside the US? Do surveys show trends?  How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan?  When did stock option expensing become mandatory? How does this affect and change my stock grants?  Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise?  Will I receive a copy of my company's annual report?  What is a "nonqualified stock option"?  What is an "incentive stock option"?  How does a Section 423 ESPP work?  What is a vesting schedule?  What is "capital gain"? Have recent tax laws changed the rates?  What methods may be used to exercise an option?  Other than paying the exercise price, what else must I do to exercise an option?  Are all stock options taxed the same?  When and how is the income at exercise taxed?  What is the standard stock option term? Do options ever expire?  Once my in-the-money options vest, are they mine forever?  How does a compensatory stock option differ from a publicly traded stock option listed in a newspaper's business section?  What is "common stock"?  What is "preferred stock"?  I have little cash. Will I still be able to take advantage of my company's stock options?  What is the SEC?  Do you have any suggestions for additional resources on stock options, equity pay, and employee ownership?      Basics: Benefits Stock Option Fundamentals (Part 1): Know Your Goals And Terms  A Financial Advisor's View Of Your Stock Plans  Stomach Volatility In Your Company's Stock Without Losing Your Mind  Manage Your Expectations To Avoid The "Option Blues"  When The Share Price Is A Factor In Pay Google Options Make Masseuse A Multimillionaire Options Have Lost Their Luster, But Many Still Lust For Them The Effects Of Stock Ownership On Employee Attitudes And Behavior: Evidence From The Rewards Of Work Studies Are stock options, restricted stock, and ESPP participation free?  Why do companies grant stock options and other equity awards? How many people have them?  Do stock options really motivate employees?  Why do stock options offer greater financial benefits than simply buying shares of company stock in the open market?  Why should I care about stock options?  How can I find out whether my employer offers stock options?  UPDATED! Why doesn't my employer offer me stock options or another type of equity compensation?  If I remain with the company for the duration of the vesting schedule, is there any way I can lose the benefit of my option?  How does a "clawback" work to take away stock grant gains?  What are the benefits of participating in an employee stock purchase plan?  How much will my options be worth in the future?      Basics: Grants How Does Your Company's Stock Plan Compare? (Part 1)  How Does Your Company's Stock Plan Compare? (Part 2)  Stock Option Terms: What You Can Expect  Your Stock Grants May Come With Strings Attached  What is the process of granting equity awards?  How much are my options worth at grant?  How does my private company decide on the size of my stock grant?  What does it mean when someone says that employee stock options have both face (or intrinsic) value and time value?  How is my stock grant's exercise price set?  UPDATED! How is fair market value (FMV) determined for setting my exercise price? What are common company practices?  Does the IRS have any rules on setting exercise prices?  What is the standard stock option term? Do options ever expire?  What is a "stock grant agreement"?  What does a stock grant agreement look like, and what terms does it cover? Where can I find samples?  What guidelines do employers use to determine how many stock options or restricted shares to grant?  What is the difference between variable and fixed stock option grant guidelines?  Is it better to be granted nonqualified stock options (NQSOs) or incentive stock options (ISOs)?  How will I know which type of option I have been granted?  Can I receive grants in more than one year?  Will I be granted stock options and/or restricted stock automatically every year?  My company granted me stock options and restricted stock under its 2000 plan. Why wasn't my grant under a plan of the current year?  What is a "stock split"?  What is "dilution"?  How does a stock split affect my stock option grants?  Do I pay any taxes when stock options are granted to me?  Must an employer grant stock options or restricted stock to all employees?  Are there any limitations on my company's discretion in granting stock options and/or restricted stock?  What is a "prospectus"?  Can the exercise price of outstanding stock options ever be raised or lowered? Can the options be repriced?  How are the dates of stock grants set, and when are grants made?  Can I have the exercise price of a new stock option grant lowered or backdated?  Can stock options be granted outside a formal stock plan?  Can I be granted both incentive stock options and nonqualified stock options?  Can my employer revoke a grant of stock options?  When I am still working at my company, can it rescind or cancel my outstanding stock options or restricted stock before vesting instead of firing me?  Can stock options be granted to union employees?  Are stock options ever granted to temporary employees?  I work for a "professional employer organization." Can stock options be granted to me?  After a grant of stock options, am I treated as a shareholder?  UPDATED! Can a grant of stock options be an insider trading violation?  In personal bankruptcy, can stock options be attached by creditors?  What is the likelihood of receiving a new-hire or periodic stock grant? Are there survey data or common practices?  Are stock option and restricted stock grants negotiable? What terms are negotiable at hire?  How many options have been granted to others in my company?  How do I know whether I am being granted my fair share of stock options? Are grant guidelines available publicly so that I can compare my grant to others in my and different industries?  What should I do if I feel that I have been granted too few options?  How common are premium, indexed, and performance-based stock options?  What are common criteria for receiving stock options outside the US?  Why is dilution important to me? How do stock grants affect it?  How common are noncompete provisions in stock grants? What activities can trigger a noncompete provision?  Why do companies do reverse stock splits, and how do they affect stock options?  UPDATED! What is a "reload" or "restoration" option? How common are they in stock plans?  Are all reload options alike?  UPDATED! What approaches do companies apply to underwater stock options?      Basics: Vesting Stock Option Fundamentals (Part 2): Vesting And Expiration  Stock Option Terms: What You Can Expect  What is a vesting schedule?  Why is vesting important to me?  What is a typical vesting schedule?  How are vesting schedules established?  Are there different types of time-based vesting schedules? Which are most common?  Must all employees have the same vesting schedule?  May I ask for a shorter vesting schedule?  Do technology companies use special vesting schedules?  How much are my vested options worth?  If I remain with the company for the duration of the vesting schedule, is there any way I can lose the benefit of my option?  When does my holding period for capital gains begin? At exercise or vesting?  When does my holding period for the special tax rate on dividends begin? At exercise or vesting?  Does the law mandate any minimum vesting schedule?  I have various stock option grants with vested options. Do I need to exercise first my oldest grants or my oldest vested options?  What service counts toward vesting?  Does service with a previous employer ever count toward vesting?  What happens to vesting if I switch from full-time to part-time work?  How does the vesting of stock options for consultants and contractors differ from the vesting of grants to employees?  Once my in-the-money options vest, are they mine forever?  When I am still working at my company, can it rescind or cancel my outstanding stock options or restricted stock before vesting instead of firing me?  Can I be fired when I am about to vest in company stock options or restricted stock/RSUs?  Do I receive vesting credit while I am on a leave of absence or a sabbatical?  How does a call to active military duty affect stock grants?  Does the reason for my leave of absence or sabbatical affect vesting?  Does maternity leave stop my vesting?  How do unpaid vacations and shutdowns affect vesting schedules?  What happens to vesting if I am transferred to a subsidiary?  What happens to vesting if I leave to work for a joint venture?  After I retire, will my company let my stock options or restricted stock continue to vest, or will it accelerate the vesting?  Is the original vesting schedule ever accelerated by reaching performance milestones or special goals?  UPDATED! What types of company goals are most commonly set for performance shares and units? What do surveys show about the performance metrics that companies use?  Can my stock option grant be designed to vest only when certain performance targets are reached?  What is an example of a performance goal that triggers or accelerates vesting?  What portion of unvested options is normally accelerated in a change of control?  Can I negotiate faster vesting later while I am working for the company?  Can the terms of my severance accelerate vesting or give me a longer period to exercise my options?  Does vesting automatically accelerate after death?  I am leaving my job. Is my company required to tell me how many vested options I have, how long I can exercise them after I leave, or when they expire?  According to surveys, how are unvested stock options most commonly treated upon various types of termination?  What happens if I terminate my employment before an option grant is fully vested?  Does the reason for my termination affect vesting?      Basics: Exercise Stock Option Fundamentals (Part 6): Exercise Methods  Stock Option Terms: What You Can Expect  Psychological Factors Affect Your Stock Option Exercise Decisions  How is my stock grant's exercise price set?  UPDATED! How is fair market value (FMV) determined for setting my exercise price? What are common company practices?  Other than paying the exercise price, what else must I do to exercise an option?  If my options are vested and have not expired or been forfeited, can my company prevent me from exercising them?  Is my employer required by law to give me choices in how I exercise my options? What are the most common methods?  Are there any limitations on when I can exercise my options?  What price is used for the market price to calculate the spread at exercise in a public company? How will I know what it is?  May I exercise unvested options?  Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise?  Is there a minimum number of stock options that I must exercise at each exercise?  How many times may I exercise options in a given year?  I have various stock option grants with vested options. Do I need to exercise first my oldest grants or my oldest vested options?  What happens if I terminate my employment before an option grant is fully vested?  I am an hourly employee. Does my gain from the exercise of options count in computing overtime?  What methods may be used to exercise an option?  Can my employer later add methods of exercise not provided for in the original grant?  What forms of exercise notice will my company accept?  Will my employer physically deliver shares to me upon exercise of an option?  How do I exercise an option for cash?  What is a "cashless exercise"?  What is the procedure for a cashless exercise/same-day sale?  In a cashless NQSO exercise, how are my taxes withheld and paid to the IRS?  Does the Sarbanes-Oxley Act outlaw cashless exercises by senior executives and directors?  What is a "sell-to-cover" exercise?  How do I use stock that I own to exercise an option in a stock swap? What is the tax treatment?  Can I use ISO stock to exercise NQSOs? Is this a disqualifying disposition that eliminates the special tax treatment for ISOs?  Must I physically deliver the certificates of the swapped shares to my employer?  If I use shares in my possession to exercise an option, must I follow special procedures?  Can I use ESPP shares in a stock-swap exercise of my options?  Can I use restricted stock in a stock swap to exercise my options?  In a stock swap, why does my employer require me to use shares that I have owned for six months or more to exercise an option?  What is a "net options" exercise?  How can I use a promissory note to exercise an option?  What are the customary terms of a promissory note used to exercise an option?  What is a "transfer agent"?  Is there a brokerage commission if I just exercise and hold my shares?  What are the different types of sell orders I can place with my option exercise?  What are margin loans?  How can I use a margin loan to exercise my options?  What are the risks of borrowing money from my company to exercise a stock option, to purchase restricted stock, or to pay the taxes at vesting?  When and how is the income at exercise taxed?  For NQSOs or SARs exercised on the last business day of 2008, or for restricted stock that vests on that day, is the income taxable in 2008 or 2009?  When does my holding period for capital gains begin? At exercise or vesting?  When does my holding period for the special tax rate on dividends begin? At exercise or vesting?  What tax statement will I receive from my broker after a sale of company stock I acquired by stock option exercise or restricted stock vesting?  Is my broker required to give me a Form 1099-B when I make a cashless, same-day sale exercise?  I have underwater stock options that are about to expire unexercised. Can I write these off as some type of loss on my tax return?  If I borrow money to exercise my options, can I deduct the interest payments against dividend income from my company stock?  My company accelerated the vesting of its outstanding stock options for "accounting reasons" and imposed restrictions on sale. Do I pay extra tax because of the acceleration, or less because I cannot sell the shares when I want?  If I sold my stock immediately upon exercise or at vesting, the transaction would violate the insider trading laws and the laws of short-swing profits under Section 16(b) because I had a purchase within six months of the sale. Would this then delay the date of the tax treatment?  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?  How do blackout periods affect stock option exercises and the tax treatment?  If the stock I receive at exercise, at vesting, or outright from the company for services is not registered with the SEC and I cannot immediately sell it, is the date for determining the taxes delayed?  Can the exercise of stock options be an insider trading violation?  How long do I have to exercise my vested stock options after my employment ends?  If I leave my company to retire, will I have a longer period to exercise my vested options than I would if I left to take another job?  What are common periods that stock plans allow for exercising stock options upon death?  Can I exercise my options before they are vested and make a timely Section 83(b) election to be taxed on the spread at that point?      Basics: Sales Stock Option Fundamentals (Part 3): Income Taxes And Withholding  Reporting Company Stock Sales How do I sell shares that I acquire through a stock option exercise, restricted stock vesting, or ESPP?  Why does my company appoint several brokerage firms or transfer agents for me to use when I exercise my options, or for the deposit of my restricted stock and ESPP stock?  Must I use a company-approved broker to sell shares?  What are the different types of sell orders I can place with my option exercise?  Why did the brokerage firm that my company requires me to use for option exercises hold the sales proceeds and stock in my account and not send me a check?  Who pays the brokerage sales commission?  Schedule D diagram! Is the brokerage commission taxed?  How is capital gain calculated?  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 is the capital gains tax rate at sale if the stock options were granted or exercised before the lower capital gains rates went into effect in 2003?  When do I receive the sales proceeds, and how will I know the amount?  How will my broker know which shares to sell? Should I identify them in some way?  If my company or a third party buys my employee stock options for cash, how is this taxed?  What is a "wash sale"?  Can I still make a "deemed sale" to reduce my total taxes on the eventual sale of my company stock?  What tax statement will I receive from my broker after a sale of company stock I acquired by stock option exercise or restricted stock vesting?  Is my broker required to give me a Form 1099-B when I make a cashless, same-day sale exercise?  How does a "clawback" work to take away stock grant gains?  How common are clawback provisions?  What are "blackout periods" and "window periods"?  How do blackout periods affect my ability to sell shares?  Can I sell my company stock through a blind trust, or another type of trust, as a defense against insider trading?  Can proceeds from stock options be garnished to pay a creditor, an ex-spouse, or a tax authority?      Basics: Valuation & Expensing Stock Option Valuation And Your Exercise Strategy  What Are My Stock Options Worth?  Options And The Deferred Tax Bite How To "Excel" At Options Valuation Valuing Employee Stock Options: A Binomial Approach Using Microsoft Excel Forget Black-Scholes? How Employees Value (Often Incorrectly) Their Stock Options What are the main models for stock option valuation, and how do they differ?  What does it mean when someone says that employee stock options have both face (or intrinsic) value and time value?  When did stock option expensing become mandatory? How does this affect and change my stock grants?  My company accelerated the vesting of its outstanding stock options for "accounting reasons" and imposed restrictions on sale. Do I pay extra tax because of the acceleration, or less because I cannot sell the shares when I want?  UPDATED! What do examples and surveys show about the effects mandatory expensing is having on my stock grants?  When did ESPP expensing become mandatory, and how may my ESPP change?  UPDATED! Do surveys show how employee stock purchase plans are changing with mandatory expensing?  How much are my options worth at grant?  How much will my options be worth in the future?  How much are my vested options worth?  What is the difference between variable and fixed stock option grant guidelines?  How do I calculate the value of my restricted stock?  Does my company take an earnings charge on its income statement for my restricted stock grant?  How do I value options and stock in a private company?  How are stock options valued when I give my spouse money or other property instead of transferring the options?  In a divorce case, how do you argue that underwater stock options have value?  How would my stock options be taxed and valued for estate tax purposes upon my death?      Basics: Alternatives Restricted Stock Versus Stock Options: Making A Rational Choice (Part 1)  Restricted Stock Versus Stock Options: Making A Rational Choice (Part 2)  What You Need To Know About Stock Appreciation Rights (SARs): Part 1  Restricted Stock Fundamentals: What You Need To Know (Part 1)  Abundant Options In Alternative Compensation Pay Daze Google Gives Employees Another Option Companies Reassess Stock-Option Grants; New Rules Force Changes In Types Of Compensation Can some employers not offer stock options or other types of equity compensation to their employees?  What types of equity compensation other than stock options are offered by employers?  What is restricted stock? Does it differ from restricted securities?  What advantages does restricted stock have over stock options?  What is the difference between restricted stock and performance shares or units?  UPDATED! What types of company goals are most commonly set for performance shares and units? What do surveys show about the performance metrics that companies use?  Which do companies grant more often: restricted stock or restricted stock units (RSUs)?  What are stock appreciation rights (SARs), and how are SARs taxed?  How do stock appreciation rights (SARs) differ from stock options, restricted stock, and RSUs?  Does all the stock option content on this website also apply to stock appreciation rights (SARs)?  What is a "phantom stock plan"?  What is an "employee stock ownership plan"?  How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan?  How does a stock option offered to an employee differ from a stock warrant acquired by an investor?  Can my employer give me a choice of stock options, restricted stock, or cash?  When did stock option expensing become mandatory? How does this affect and change my stock grants?  UPDATED! What do examples and surveys show about the effects mandatory expensing is having on my stock grants?  What is an employee stock purchase plan?  Are there different kinds of employee stock purchase plans?  How does an ESPP differ from a stock option plan?  As a director, can I elect to take part of my retainer as "deferred stock units"?  What are "discounted" stock options, and how are they taxed?      Basics: Underwater Options Stomach Volatility In Your Company's Stock Without Losing Your Mind  Stockbrokers' Secrets (Part 4): What I Tell My Best Clients About Down-Market Strategy  Better Late Than Never: Stock Option Strategy For The Market Upturn  Fundamentals Of Employee Stock Purchase Plans (Part 4): Down Markets And Other Tax Topics  Manage Your Expectations To Avoid The "Option Blues"  No Lifeline For Underwater Options When Your Stock Options Are Underwater Businesses Breathe Life Into Options What are "underwater" stock options? Why shouldn't I exercise them?  UPDATED! What approaches do companies apply to underwater stock options?  UPDATED! What is an options exchange?  I have underwater options. Will I get a tax loss when I exercise them?  I have underwater stock options that are about to expire unexercised. Can I write these off as some type of loss on my tax return?  I have both in-the-money and underwater options. If I exercise them all and immediately sell the stock, can I offset the gains with the losses on the underwater options?  NEW! Can my ESPP go underwater or be affected in other ways by a down market?  NEW! Can restricted stock and performance shares go underwater?  Can the exercise price of outstanding stock options ever be raised or lowered? Can the options be repriced?  If my company offers me an options exchange or reprices my underwater options, will there be any tax impact on me? What factors should I consider in accepting the exchange?  My company will let me exchange my underwater options for restricted stock. What is the tax impact?  If my company or a third party buys my employee stock options for cash, how is this taxed?  How many employees at Microsoft elected to exchange their underwater options for cash?  In an acquisition, what happens to my underwater stock options?  If my company cancels my underwater stock options, will they still count against the $100,000 ISO limit?  What tax treatment applies if I exercise vested pre-IPO options that now cost more to exercise than they are worth?  In a divorce case, how do you argue that underwater stock options have value?  At death, the value of options is included in the gross estate for estate tax purposes. But what happens if the stock's value drops below the exercise price and the options expire unexercised?  NQSOs     NQSOs: Basics Stock Option Fundamentals (Part 3): Income Taxes And Withholding  What is a "nonqualified stock option"?  When is a nonqualified stock option taxed?  How do I determine the amount of income I get from the exercise of a nonqualified stock option?  Will my employer report to the IRS any income from an NQSO exercise?  Is the spread at exercise of a nonqualified stock option subject to federal income-tax withholding?      NQSOs: Taxes Stock Option Fundamentals (Part 4): NQSO Taxation  How The Bush Tax Cuts Still Affect Your Stock Option Planning  Taxable And Nontaxable Income: IRS Publication 525 How is the spread at exercise of an NQSO taxed for federal income-tax purposes?  When I hold NQSO shares after exercise, what tax applies when I later sell the stock?  Is the spread at exercise of a nonqualified stock option subject to Social Security taxes?  Is the spread at exercise of a nonqualified stock option subject to federal unemployment taxes?  Is the spread at exercise of a nonqualified stock option subject to state and local taxes?  Can I deduct the state tax that was withheld from my NQSO exercise?  What federal tax rates ultimately apply to the exercise of a nonqualified stock option?  Does the tax-withholding rate for supplemental income differ for amounts less than $1 million and for amounts over $1 million?  What is "capital gain"? Have recent tax laws changed the rates?  When does my holding period for capital gains begin? At exercise or vesting?  How is capital gain calculated?  How does my employer calculate the amount of withholding due at the exercise of a nonqualified stock option?  How do I pay any required tax-withholding when I exercise an NQSO?  In a cashless NQSO exercise, how are my taxes withheld and paid to the IRS?  Will the amount of tax withheld at NQSO exercise cover the amount of tax that I am required to pay when I file my return?  Schedule D diagram! How are capital gains taxed when I sell my NQSO stock?  When does my holding period for the special tax rate on dividends begin? At exercise or vesting?  I'm no longer an employee, so why is there withholding on my NQSO or SARs exercise?  I may leave my company to become a consultant, retire, or take another job. Will taxes still be withheld on my NQSOs, SARs, and/or restricted stock as they were when I was an employee? What if I live in another state when I exercise them?  Are the tax rules and withholding for NQSOs different if I am an independent contractor, consultant, or outside director and not an employee?      NQSOs: Taxes Advanced How Tax Rate Changes Impact Strategies For Stock Options & Restricted Stock (Part 1)  Reporting Company Stock Sales NQSOs: Tax Return Tips And Traps  Avoid Tax Return Mistakes With Stock Options & ESPPs: What You Need To Know In 2009  Stock Option Financial Planning After Your Tax Return Is Filed And At Year-End (Part 1)  Taking An Overseas Assignment: Stock Compensation For Mobile Employees  How The Bush Tax Cuts Still Affect Your Stock Option Planning  IRS And Treasury Warn Against Frivolous Tax Arguments Surrounding Stock Options May I have my employer withhold more taxes upon my exercise of an NQSO than the minimum required amount?  If I exercise NQSOs, will I need to make estimated tax payments?  How is fair market value determined for W-2 reporting of NQSO taxable income at exercise and for tax withholding?  My new company withheld Social Security tax from my wages even though I "maxed out" on these taxes this year from my stock option exercise and restricted stock vesting at my prior employer. Can I get a refund or a credit on my tax return?  Are the tax rules and withholding for NQSOs different if I am an independent contractor, consultant, or outside director and not an employee?  How do I report the income that results from the exercise of a nonqualified stock option on my federal income-tax return?  What are the biggest mistakes related to stock options I can make on my tax return, and how can I avoid them?  W-2 diagram! What will my W-2 show after I exercise nonqualified stock options?  Schedule D diagram! How do I report NQSO sales on my federal income-tax return?  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?  I received a notice (CP-2000) from the IRS stating that, according to last year's tax return, I owe money for the cashless exercise of my stock options. I thought I paid all the taxes through withholding at exercise. How do I reply?  I acquired stock from 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?  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?  In what ways can I pay my taxes if I don't have the money to pay them with my tax return?  When I file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve stock grant income?  UPDATED! If I did not qualify for a tax rebate under the Economic Stimulus Act in 2008, can I still qualify in 2009?  What happens if I sell the shares for less than the fair market value on the date of exercise of the NQSO?  The spread on my NQSO exercise is reported on my W-2 as ordinary income. Can I use my stock-trading losses to offset this income?  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?  Are there any stock-option strategies for using my capital-loss carry-forwards?  Do I receive any tax benefits if a capital loss is generated by my sale of NQSO shares?  I have both in-the-money and underwater options. If I exercise them all and immediately sell the stock, can I offset the gains with the losses on the underwater options?  Do I have a tax loss if my NQSOs expire without being exercised?  Both dividends and long-term capital gains are now taxed at the same rate. Can I net my dividends from my company stock against capital loss from the sale of company stock or another security?  Are there financial strategies for NQSOs?  What are some year-end strategies for stock options, stock appreciation rights, and restricted stock?  My company's stock price has dropped since I exercised my NQSOs. Is there anything I can do to reduce the taxes I owed on the spread at the time of exercise?  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 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?  What is the tax impact on me if my company modifies outstanding stock options or SARs, such as by extending the option term?  UPDATED! Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?  How do I use stock that I own to exercise an option in a stock swap? What is the tax treatment?  What tax treatment applies after ISOs are converted to NQSOs?  With NQSOs, is there any tax risk after exercise if the market price of my stock substantially rises or drops by the time I pay my taxes?  If I sold my stock immediately upon exercise or at vesting, the transaction would violate the insider trading laws and the laws of short-swing profits under Section 16(b) because I had a purchase within six months of the sale. Would this then delay the date of the tax treatment?  If I exercise my NQSO and immediately donate the shares to charity, do I still need to pay the taxes on the spread at exercise?  What are "discounted" stock options, and how are they taxed?  UPDATED! Does the accelerated vesting of my stock options, restricted stock, and/or performance shares in a change of control or termination have any tax impact on me, such as for ISOs and golden parachute payments?  Is it possible to defer the gains on an NQSO exercise by having the shares delivered in a later tax year?  UPDATED! Will my company be able to take a tax deduction for the value of my restricted stock, restricted stock units, performance shares, or stock options if my compensation already exceeds $1 million?  ISOs     ISOs: Basics What is an "incentive stock option"?  Why don't all companies grant ISOs? What are the disadvantages to companies?  What are the holding period requirements of an ISO?  UPDATED! 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?  What is a "disqualifying disposition," what can cause it, and why does my company care?  Why does my employer require me to give notice of a sale of ISO or ESPP stock?  Is the gifting or donation of stock that I acquired from an ISO exercise or ESPP purchase a disqualifying disposition? What is the tax treatment for early sale?  I receive yearly option grants from my company. If I exercise all the options in one year's grant and sell just part of the ISO stock, is it a disqualifying disposition for all the ISO shares in that grant?  How are ISOs usually handled in divorce?  Is transferring ISO stock into a joint account with my spouse a disqualifying disposition if the stock has not met the holding-period requirements?  In a divorce agreement, I am transferring to my former spouse ISO stock that has not met the holding period requirement. Is this a disqualifying disposition?      ISOs: Limits Final ISO Regulations Affect Stock Plan Design, Optionholders, And Advisors (Part 1)  Final ISO Regulations Affect Stock Plan Design, Optionholders, And Advisors (Part 2)  Treasury And IRS Finalize Regulations For Incentive Stock Options Early Exercise ISOs Complicated By Final IRS Regulations  Is there a limit to the number or value of ISOs that I may be granted?  Can ISOs be granted at an exercise price below fair market value?  When I am no longer with my company (e.g., because of job loss or disability), will tax-law limits or deadlines dictate when I must exercise an ISO?  Can independent contractors, consultants, or outside directors be granted ISOs?  How is the $100,000 limit on ISOs calculated?  Can the annual limit of $100,000 in exercisable ISOs be adversely affected by any post-grant events, such as job termination or the acceleration of vesting in a merger?  If my company cancels my underwater stock options, will they still count against the $100,000 ISO limit?  What other limitations apply to ISOs?  Can an ISO be divided in a divorce?  Can ISOs be transferred to a grantor trust?  Do special rules determine when a leave of absence is a termination of employment for the purposes of ISOs?  Are the disability rules the same for ISOs?      ISOs: Taxes Stock Option Fundamentals (Part 3): Income Taxes And Withholding  Treasury And IRS Finalize Regulations For Incentive Stock Options Proposed Regulations For ISOs Taxes On Incentive Stock Options Taxable And Nontaxable Income: IRS Publication 525 What are the tax consequences of exercising an ISO?  UPDATED! Has recent legislation changed the taxation of incentive stock options?  What is "capital gain"? Have recent tax laws changed the rates?  When does my holding period for capital gains begin? At exercise or vesting?  What are the ISO withholding rules?  Did Congress or the IRS change the withholding rules that apply to ISOs and ESPPs?  W-2 diagram! What will my W-2 show after I exercise incentive stock options?  How am I taxed if I make a disqualifying disposition (e.g., sale) of ISO shares in the year I exercised the option?  How am I taxed on my gain from a sale of stock that I acquired in an ISO exercise?  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 tax treatment applies after ISOs are converted to NQSOs?  I hear that when I sell my ISO stock at exercise or within one year I'm taxed as if I had NQSOs. Does this mean that on the spread at exercise (or when I sell the stock) there is withholding and Social Security and Medicare tax?  If I plan to sell my ISO stock before the end of the required holding periods (i.e., a disqualifying disposition), is there any tax advantage to receiving ISOs instead of NQSOs?  My company allows me to exercise my ISOs more than 90 days after I leave my job. What is the tax treatment at exercise?      ISOs: Taxes Advanced Reporting Company Stock Sales ISOs: Tax Return Tips And Traps  Avoid Tax Return Mistakes With Stock Options & ESPPs: What You Need To Know In 2009  Stock Option Fundamentals (Part 5): Incentive Stock Option Taxation & Alternative Minimum Tax  ISOs And Wash Sales: A Trap Within A Trap  Taking An Overseas Assignment: Stock Compensation For Mobile Employees  Hedging Your ISO Stock  Final ISO Regulations Affect Stock Plan Design, Optionholders, And Advisors (Part 1)  Final ISO Regulations Affect Stock Plan Design, Optionholders, And Advisors (Part 2)  Early Exercise ISOs Complicated By Final IRS Regulations  Now Is The Time To Exercise ISOs What are some year-end strategies for stock options, stock appreciation rights, and restricted stock?  What is the tax impact on me if my company modifies outstanding stock options or SARs, such as by extending the option term?  Schedule D diagram! After I satisfy the ISO holding periods, how do I report a sale on my tax return?  Schedule D diagram! I did a cashless exercise with my incentive stock options (ISOs). Should I report the transaction for capital gains purposes on Schedule D even though the gain is zero, and should I worry about the alternative minimum tax (AMT)?  Schedule D diagram! How am I taxed if I have made a disqualifying disposition (e.g., sale) of ISO shares in a different year than the year I exercised the option? How do I report this?  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?  I acquired stock from 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?  The amount of my spread at exercise was not listed on the W-2 that I received from my company, even though I made a disqualifying disposition. Do I report this gain on my tax return, and how will I be taxed?  In what ways can I pay my taxes if I don't have the money to pay them with my tax return?  How do I use stock that I own to exercise an option in a stock swap? What is the tax treatment?  Can I use ISO stock to exercise NQSOs? Is this a disqualifying disposition that eliminates the special tax treatment for ISOs?  Schedule D diagram! When I sell my ISO stock in a disqualifying disposition, will the broker's commission reduce the amount of ordinary income on my W-2 or the amount of gross sales proceeds on my Schedule D?  Is the gifting or donation of stock that I acquired from an ISO exercise or ESPP purchase a disqualifying disposition? What is the tax treatment for early sale?  Both dividends and long-term capital gains are now taxed at the same rate. Can I net my dividends from my company stock against capital loss from the sale of company stock or another security?  The spread on my cashless ISO exercise is reported on my W-2 as ordinary income. Can I use my stock-trading losses to offset this income?  Is all the income that results from a disqualifying disposition of ISO shares a short-term capital gain that I can net against my capital losses on Schedule D of my tax return?  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 sold my stock immediately upon exercise or at vesting, the transaction would violate the insider trading laws and the laws of short-swing profits under Section 16(b) because I had a purchase within six months of the sale. Would this then delay the date of the tax treatment?  Is writing call options on, or buying put options for, my ISO stock a disqualifying disposition?  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?  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 is the tax treatment of ISOs after death?  I exercised ISOs and am hoping to wait 12 months before selling to get the favorable ISO tax treatment. What happens in a cash M&A deal when I'm trying for the one-year holding-period mark but the buyer pays cash for the stock? Is there any way around incurring a disqualifying disposition?  UPDATED! Does the accelerated vesting of my stock options, restricted stock, and/or performance shares in a change of control or termination have any tax impact on me, such as for ISOs and golden parachute payments?  UPDATED! Will my company be able to take a tax deduction for the value of my restricted stock, restricted stock units, performance shares, or stock options if my compensation already exceeds $1 million?  UPDATED! Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?      ISOs: AMT Stock Option Fundamentals (Part 5): Incentive Stock Option Taxation & Alternative Minimum Tax  Dr. Strange Tax, Or: How I Learned To Stop Worrying And Love The AMT  How The Bush Tax Cuts Still Affect Your Stock Option Planning  IRS Instructions For Form 6251: Alternative Minimum Tax Alternative Universe Avoid These Tax Blunders Taxes On Incentive Stock Options UPDATED! What is the alternative minimum tax (AMT)? What is the latest news about AMT reform in Congress?  Is it easy to calculate AMT liability?  UPDATED! In general, how does the alternative minimum tax (AMT) calculation work?  How do stock options affect my liability for paying alternative minimum tax?  UPDATED! 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 October 2008 change this?  UPDATED! I have large unused AMT credits. How does the new tax law about AMT credits help me to use them quicker?  Do I eliminate AMT by selling in the year of exercise or within a year of exercise?  I held ISO stock on which I paid AMT in a prior year. Do I still need to determine my AMT even if I do not sell the stock?  UPDATED! Are there any general guidelines for assessing when I may be hit with the alternative minimum tax? For example, my spouse and I together earn $100,000. Do we still need to worry about AMT liability when I exercise ISOs?      ISOs: AMT Advanced Refundable AMT Credit (Part 1): Different Rules For Old Unused Credit  Refundable AMT Credit (Part 2): The Calculation  Stock Option Financial Planning After Your Tax Return Is Filed And At Year-End (Part 1)  The ISO Tax Trap And The AMT Credit Myth: What To Do Before Exercise And At Year-End  ISOs: Tax Return Tips And Traps  Avoid Tax Return Mistakes With Stock Options & ESPPs: What You Need To Know In 2009  How The Bush Tax Cuts Still Affect Your Stock Option Planning  Early Exercise ISOs Complicated By Final IRS Regulations  ISOs And Wash Sales: A Trap Within A Trap  How To Control Your AMT Exposure The ISO Trap Tax Timing IRS And Treasury Warn Against Frivolous Tax Arguments Surrounding Stock Options UPDATED! I have large unused AMT credits. How does the new tax law about AMT credits help me to use them quicker?  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?  Earlier in the year, I exercised ISOs, held the stock, and had a big spread from the market price that will trigger AMT. But my company's stock price has dropped below my exercise price. Can I eliminate AMT and even claim a tax loss?  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?  I exercised ISOs early last year. The stock has dropped, and I want to sell it before the one-year anniversary of the exercise date. Is this considered a disqualifying disposition that would cause the spread at exercise not to be a preference item for AMT?  Are there any AMT strategies when I also have NQSOs?  If I exercise ISOs and hold the stock (triggering AMT for the spread) or sell the stock in a disqualifying disposition, will I need to make estimated tax payments?  After I have paid AMT for my ISO exercise and hold, what are some mistakes that I must avoid on my tax return?  What are the biggest mistakes related to stock options I can make on my tax return, and how can I avoid them?  If I've paid AMT, is there an adjustment when I sell the ISO shares so that I get all the taxes back?  What should I do if I forgot to report the ISO exercise/hold on my tax return but now realize I may owe AMT?  What is the tax basis of my ISO stock that I use to calculate the sale gain for AMT purposes?  Are qualified dividends included in the AMT calculation?  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?  My company's stock price has dropped substantially since I exercised ISOs, leaving me with a ruinous AMT bill much larger than my gains. Is there anything I can do to reduce or eliminate the AMT I owe?  My company allows me to exercise my ISOs early and receive stock subject to a company repurchase right during the vesting schedule. Does my early exercise before vesting affect the calculations for AMT or disqualifying dispositions?  What is a "wash sale"?  How does the wash sale rule apply if I sell ISO stock to avoid AMT and then quickly repurchase the stock at current market prices?  When I gift stock from an incentive stock option exercise/hold that triggered AMT, do I get an adjustment for it on my AMT return?  What would happen to my AMT credit at my death?  ESPPs     ESPPs: Basics Fundamentals Of Employee Stock Purchase Plans (Part 1): Basic Structure And Terms  Fundamentals Of Employee Stock Purchase Plans (Part 2): Design Limitations And Enrollment Procedures  Are You Taking Full Advantage Of Your Company's Employee Stock Purchase Plan?  What is an employee stock purchase plan?  How does an ESPP differ from a stock option plan?  Are there different kinds of employee stock purchase plans?  How does a Section 423 ESPP work?  Why is a Section 423 ESPP a good deal?  How does an ESPP work if it is not a qualified plan under Internal Revenue Code Section 423?  When did ESPP expensing become mandatory, and how may my ESPP change?  UPDATED! Do surveys show how employee stock purchase plans are changing with mandatory expensing?  Why do companies offer employee stock purchase plans?  How can I find out whether my company has an employee stock purchase plan, what type it is, and what its basic features are?  UPDATED! What documents should I read before deciding to participate in my company's ESPP? What is my company required to show me?  What is the eligible compensation that can be used for calculating the money that is available for the stock purchase?  How is the fair market value of company common stock determined for calculating the discounted purchase price?  Under the plan, do I pay commissions on the purchase of stock or on the sale of that stock?  What happens to my payroll deductions? What happens if more money has accumulated in my ESPP account than can be used to buy shares?  What happens to the purchased shares, and when will I receive my stock certificates?  When can I sell my ESPP shares?  How do I sell shares that I acquire through a stock option exercise, restricted stock vesting, or ESPP?  Why does my employer require me to give notice of a sale of ISO or ESPP stock?  If I leave the company, what happens to the money that has been deducted from my paycheck to purchase ESPP shares?  How will a stock split affect my ESPP and the shares I purchased just before the split?  How does the split affect brokerage accounts of ESPP participants?  How does the split affect the ESPP enrollment price that will be established just prior to the split?  What happens to my ESPP when my company is acquired?  In an acquisition, what happens to money that has been waiting to purchase shares in my ESPP?  How many employees generally participate in ESPPs?      ESPPs: Rules Fundamentals Of Employee Stock Purchase Plans (Part 2): Design Limitations And Enrollment Procedures  Employee Stock Purchase Plans & Your Financial Planning (Part 1)  How much will I pay when I buy stock in the employee stock purchase plan?  Will the price always be discounted from the fair market value of the stock?  UPDATED! Who is eligible to participate in the plan, and who can be excluded?  What are the most common eligibility requirements for ESPPs?  Is there a minimum age for participation in my company's ESPP?  What is the maximum earnings amount or percentage that I can have withheld to purchase shares under the plan? What is the minimum?  How do I join or enroll in an employee stock purchase plan?  For what period does my enrollment continue to be effective?  What is an "offering date" or "enrollment date"?  UPDATED! What is a "grant date" in an ESPP?  What is an "offering period" or "enrollment period"?  What is the longest the offering period can be?  What is a "purchase period"?  What is the "exercise or purchase date"?  When are my shares purchased?  What is a "lookback"?  If I elect to participate in the plan, can I withdraw at any time?  If I withdraw from the plan, how soon can I resume participation?  NEW! Under my ESPP, can I assign or transfer my rights to another person?  Can I stop deductions for a few pay periods and then start again?  Can I reduce or increase the percentage of my payroll deductions?  Can I roll unused ESPP funds into the next purchase period?  Can I begin my participation after an offering period has begun?  How do you calculate the $25,000 annual purchase limit?  How does the $25,000 calculation work when the offering period spans more than one year?  Once I begin participation, how can I check the status of my account?  Can I contribute additional amounts if I want to buy additional shares of stock?  Are there any restrictions on how much stock I can sell at once?      ESPPs: Advanced ESPP Choices: Flip Or Hold? (Part 1)  ESPP Choices: Flip Or Hold? (Part 2)  Employee Stock Purchase Plans & Your Financial Planning (Part 1)  Employee Stock Purchase Plans & Your Financial Planning (Part 2)  When did ESPP expensing become mandatory, and how may my ESPP change?  UPDATED! Do surveys show how employee stock purchase plans are changing with mandatory expensing?  UPDATED! 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?  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?  NEW! Can my ESPP go underwater or be affected in other ways by a down market?  In a down market, why does my ESPP automatically opt me out and re-enroll me in a new offering period?  How will my broker know which shares to sell? Should I identify them in some way?  How does the company know I've sold my shares?  UPDATED! How common is it for an ESPP to have a mandatory holding period for purchased stock?  Can I name a beneficiary for my stock options, ESPPs, stock appreciation rights, or restricted stock?  If I die, what will happen to my ESPP participation and the holding period rules?  Does participating in an ESPP affect my ability to contribute to a 401(k) plan or IRA?  Can my company use the IPO price as the ESPP grant date price?  Can the purchase of ESPP stock be an insider-trading violation?  Are there any securities-laws restrictions on my sale of ESPP stock?  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?  Can a senior executive or board member participate in an ESPP?  I am an officer in my company. Should I avoid participating in our ESPP because of Section 16 reporting and issues that stem from liability for short-swing profits?      ESPPs: Taxes ESPP Choices: Flip Or Hold? (Part 1)  Fundamentals Of Employee Stock Purchase Plans (Part 3): Tax Treatment Of Your Purchases And Sales  Avoid Tax Return Mistakes With Stock Options & ESPPs: What You Need To Know In 2009  What are the eventual tax consequences of participating in a tax-qualified employee stock purchase plan (ESPP)?  My company's ESPP is not tax-qualified under Internal Revenue Code Section 423. What is the tax treatment for a stock purchase and sale?  My ESPP has no discount apart from my company's elimination of any fees, such as the broker's commission. Is this taxable?  How long must I hold shares purchased under a Section 423 ESPP to receive favorable tax treatment?  Do I have to pay tax when stock is purchased for me under the plan?  Are taxes withheld from the spread when you buy stock under a tax-qualified employee stock purchase plan?  Will my company withhold taxes at the sale of stock that I purchased under my employee stock purchase plan?  Did Congress or the IRS change the withholding rules that apply to ISOs and ESPPs?  Does the alternative minimum tax (AMT) apply to the ESPP discount spread?  Are pre- or post-tax dollars used to purchase the stock in the ESPP? Is the salary used to purchase stock still included in my income?  What is an ESPP "disqualifying disposition," what can cause it, and why does my company care?  Is transferring ESPP stock into a joint account with my spouse a disqualifying disposition if the stock has not met the holding-period requirements?  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?  Do the holding-period requirements apply to my ESPP stock after I leave the company?  Can I use ESPP shares in a stock-swap exercise of my options?      ESPPs: Taxes Advanced ESPP Choices: Flip Or Hold? (Part 2)  Employee Stock Purchase Plans & Your Financial Planning (Part 1)  Reporting Company Stock Sales Fundamentals Of Employee Stock Purchase Plans (Part 4): Down Markets And Other Tax Topics  NEW! Can my ESPP go underwater or be affected in other ways by a down market?  If my company eliminates the lookback for my ESPP, will the tax treatment change?  How will I be taxed when I sell the stock if I meet the holding-period requirements under Section 423 for tax-qualified ESPPs?  If I do not meet the ESPP holding-period requirements to receive favorable tax treatment, how will I be taxed when I sell the stock?  What, if anything, shows up on my W-2 when I purchase discounted shares of stock under an ESPP?  W-2 diagram! If I sell ESPP shares after the required holding periods, what will appear on my W-2?  W-2 diagram! If I make a disqualifying disposition with my ESPP stock, what will appear on my W-2?  W-2 diagram! My company's employee stock purchase plan is not tax-qualified under Section 423 of the Internal Revenue Code. What will my W-2 show after an ESPP purchase?  Schedule D diagram! If I sell ESPP shares after the required holding periods, how do I report the sale on my Schedule D?  Schedule D diagram! If I make a disqualifying disposition with my ESPP stock, how do I report the sale on my Schedule D?  Schedule D diagram! My company's ESPP is not tax-qualified under Section 423 of the Internal Revenue Code. How do I report any gain that results from the sale of my ESPP shares on my federal income-tax return?  I acquired stock from 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?  Can I ever have ordinary income but no actual gain on my ESPP stock sales?  I bought stock in my company's ESPP and am hoping to wait 12 months before selling to get the favorable ESPP tax treatment. What happens in a cash M&A deal when I am trying to reach the one-year holding-period mark but the buyer pays cash for the stock before then? Is there any way around a disqualifying disposition?  Is the gifting or donation of stock that I acquired from an ISO exercise or ESPP purchase a disqualifying disposition? What is the tax treatment for early sale?  If I gift stock that has met the holding periods for Section 423 ESPPs, what is the tax treatment?  What is a "wash sale"?  What is the tax treatment of ESPP shares at death?  UPDATED! Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?  Restricted Stock     Restricted Stock: Basics Why You'll Learn To Like Restricted Stock Grants  Restricted Stock Fundamentals: What You Need To Know (Part 1)  Restricted Stock & RSUs: The Next New Thing In Stock Grants?  Does this website's content on restricted stock also apply to restricted stock units (RSUs)?  What is restricted stock? Does it differ from restricted securities?  What advantages does restricted stock have over stock options?  NEW! Can restricted stock and performance shares go underwater?  Which do companies grant more often: restricted stock or restricted stock units (RSUs)?  What is the process of granting equity awards?  Are stock option and restricted stock grants negotiable? What terms are negotiable at hire?  What guidelines do employers use to determine how many stock options or restricted shares to grant?  My company granted me stock options and restricted stock under its 2000 plan. Why wasn't my grant under a plan of the current year?  What does a stock grant agreement look like, and what terms does it cover? Where can I find samples?  Does a grant of restricted stock or performance shares have an expiration date, as stock options do?  Do I need to buy the restricted stock from my company or exercise something to get it?  How do I calculate the value of my restricted stock?  How does a stock split affect my restricted stock grant?  Do I receive dividends on unvested restricted stock and have voting rights?  UPDATED! Can I reinvest my restricted stock dividends in more company stock instead of taking cash income now?  Do I get to hold the stock itself with a restricted stock grant?  What is a vesting schedule?  Are there different types of time-based vesting schedules? Which are most common?  What is a typical vesting schedule?  What service counts toward vesting?  Do I forfeit my restricted stock if I leave the company before vesting?  Can I be fired when I am about to vest in company stock options or restricted stock/RSUs?  My restricted stock will be "released" at vesting. What does that mean?  What is a lapse election, and why do I need to make it before the restricted stock or restricted stock units vest?  Once my restricted stock vests, is it mine forever?  How do I sell shares that I acquire through a stock option exercise, restricted stock vesting, or ESPP?      Restricted Stock: Advanced Restricted Stock: Tax, Financial, Estate, And Retirement Planning (Part 1)  Restricted Stock: Tax, Financial, Estate, And Retirement Planning (Part 2)  Restricted Stock Versus Stock Options: Making A Rational Choice (Part 1)  Restricted Stock Versus Stock Options: Making A Rational Choice (Part 2)  Decisions At Vesting With Restricted Stock (Part 2): Hold Or Fold?  Restricted Stock & RSUs: Education & Communications  Pay Daze Can you calculate whether it is better to be granted stock options or restricted stock?  Why do companies grant fewer restricted stock shares (or units) than stock options? Are there any trends in the ratios of shares for options?  When did stock option expensing become mandatory? How does this affect and change my stock grants?  UPDATED! What do examples and surveys show about the effects mandatory expensing is having on my stock grants?  Does my company take an earnings charge on its income statement for my restricted stock grant?  What is the difference between variable and fixed restricted stock grant guidelines?  What is the difference between restricted stock and performance shares or units?  UPDATED! What types of company goals are most commonly set for performance shares and units? What do surveys show about the performance metrics that companies use?  How common are stock options, restricted stock, and performance shares outside the US? Do surveys show trends?  How do stock appreciation rights (SARs) differ from stock options, restricted stock, and RSUs?  Do employers ever issue additional options or restricted stock to replace grants that were forfeited at a previous employer?  Can stock options, restricted stock, or an ESPP affect my other employee benefits, such as 401(k) contributions?  Any data on vesting schedules for restricted stock?  Do I receive vesting credit while I am on a leave of absence or a sabbatical?  Does maternity leave stop my vesting?  What happens to my stock grants if I become temporarily disabled?  After I retire, will my company let my stock options or restricted stock continue to vest, or will it accelerate the vesting?  Is the original vesting schedule ever accelerated by reaching performance milestones or special goals?  What is an example of a performance goal that triggers or accelerates vesting?  How do "change of control" provisions in stock plans generally work to accelerate vesting?  Can I transfer or pledge restricted stock before vesting?  When I am still working at my company, can it rescind or cancel my outstanding stock options or restricted stock before vesting instead of firing me?  Do restricted stock grants have noncompete provisions?  UPDATED! 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?  How does a dividend affect the value of stock options, restricted stock, and restricted stock units?  Does receiving dividend payments on my restricted stock before it vests mean I automatically get the stock even if I leave the company before vesting?  Can I use restricted stock in a stock swap to exercise my options?  If my restricted stock vests during a blackout period or when I know secret stock-price-moving information, can I be charged with insider trading?  Should I set up a Rule 10b5-1 trading plan to cover the stock I will sell or surrender to pay withholding taxes when my restricted stock vests?  What is "short-swing profits" liability, and how does it affect my stock options and restricted stock?  I am a senior executive. When do I make my Form 4 filing for restricted stock, restricted stock units, and performance shares?  I am a senior executive and plan to sell enough restricted stock at vesting to cover the taxes I will owe. Is this sale still subject to the short-swing profit rules under Section 16?  Can my company lend me money to buy its stock or pay for taxes on restricted stock at vesting? Can it later cancel or modify that debt?  What are the risks of borrowing money from my company to exercise a stock option, to purchase restricted stock, or to pay the taxes at vesting?  How does a court determine whether my soon-to-be-former spouse should receive any part of my stock grant?  Can I name a beneficiary for my stock options, ESPPs, stock appreciation rights, or restricted stock?  If my company is bought for stock of the acquirer, will I be able to purchase the same number of shares in the buyer as I am allowed to with my current options and restricted stock?  How might the terms of my company's stock plan or my grant agreement affect the treatment of my options and restricted stock if my company were acquired?      Restricted Stock: Restricted Stock Units Does this website's content on restricted stock also apply to restricted stock units (RSUs)?  What is the difference between restricted stock and restricted stock units (RSUs)?  Which do companies grant more often: restricted stock or restricted stock units (RSUs)?  Why would my company grant me restricted stock units (RSUs) instead of restricted stock?  How does the taxation of restricted stock and restricted stock units differ?  What is a lapse election, and why do I need to make it before the restricted stock or restricted stock units vest?  W-2 diagram! What will my W-2 show after the vesting of restricted stock units?  Schedule D diagram! When my restricted stock units vested, my company automatically withheld shares to cover the tax. Do I need to report these shares on my Schedule D?  Schedule D diagram! How do I report a sale of shares from restricted stock units (RSUs) on my federal income-tax return?  Do I get dividends with restricted stock units (RSUs)? How are they taxed?  When does my capital gains holding period begin for grants of restricted stock and restricted stock units (RSUs)?  Can I make a Section 83(b) election for a grant of restricted stock units (RSUs)?  Can my company convert restricted stock into restricted stock units?  With restricted stock units and performance shares, can I defer delivery of the shares at vesting?  As a director, can I elect to take part of my retainer as "deferred stock units"?  I am a senior executive. When do I make my Form 4 filing for restricted stock, restricted stock units, and performance shares?  UPDATED! Will my company be able to take a tax deduction for the value of my restricted stock, restricted stock units, performance shares, or stock options if my compensation already exceeds $1 million?      Restricted Stock: Performance Shares Performance Shares: What You Need To Know (Part 1)  Performance Shares: What You Need To Know (Part 2)  What is the difference between restricted stock and performance shares or units?  UPDATED! What do examples and surveys show about the effects mandatory expensing is having on my stock grants?  NEW! Can restricted stock and performance shares go underwater?  Is the original vesting schedule ever accelerated by reaching performance milestones or special goals?  UPDATED! What types of company goals are most commonly set for performance shares and units? What do surveys show about the performance metrics that companies use?  Does a grant of restricted stock or performance shares have an expiration date, as stock options do?  W-2 diagram! What will my W-2 show after the vesting of performance shares?  Schedule D diagram! How do I report a sale of performance shares on my federal income-tax return?  How common are stock options, restricted stock, and performance shares outside the US? Do surveys show trends?  How common are premium, indexed, and performance-based stock options?  Can my stock option grant be designed to vest only when certain performance targets are reached?  I am a senior executive. When do I make my Form 4 filing for restricted stock, restricted stock units, and performance shares?  UPDATED! Will my company be able to take a tax deduction for the value of my restricted stock, restricted stock units, performance shares, or stock options if my compensation already exceeds $1 million?  With restricted stock units and performance shares, can I defer delivery of the shares at vesting?  UPDATED! Does the accelerated vesting of my stock options, restricted stock, and/or performance shares in a change of control or termination have any tax impact on me, such as for ISOs and golden parachute payments?      Restricted Stock: Taxes Decisions At Grant With Restricted Stock (Part 1): Tax Fundamentals  Restricted Stock Taxation: What You Need To Know (Part 2)  Decisions At Vesting With Restricted Stock (Part 1): Withholding  Stock Options Versus Restricted Shares: A Case Of Risk Versus Reward Does this website's content on restricted stock also apply to restricted stock units (RSUs)?  When and how is a grant of restricted stock or RSUs taxed?  W-2 diagram! What will my W-2 show after the vesting of restricted stock?  W-2 diagram! What will my W-2 show after the vesting of restricted stock units?  Are the tax rules for restricted stock different if I am an independent contractor, a consultant, or an outside director and not an employee?  What is "substantial risk of forfeiture" and how does it affect the taxation of restricted stock?  Can I control when I will be taxed on a restricted stock grant?  How and when are taxes withheld from my restricted stock?  Does the tax-withholding rate for supplemental income differ for amounts less than $1 million and for amounts over $1 million?  Is the value of my restricted stock at vesting subject to state and local taxes? What if I move?  When my restricted stock vests, how does my company choose the stock price for calculating my W-2 reporting and my share withholding?  How are the dividends on restricted stock taxed and reported to me?  When does my capital gains holding period begin for grants of restricted stock and restricted stock units (RSUs)?  What long-term capital gains rate applies to sales proceeds from restricted stock granted or vested before May 6, 2003, when the capital gains rate fell to 15%?  My company will let me exchange my underwater options for restricted stock. What is the tax impact?  Is my spouse entitled to part of my stock options and other stock grants upon our divorce?  Who pays taxes when restricted stock or vested company shares are transferred in a divorce settlement? How is restricted stock handled in divorce?  If I die, the vesting of my restricted stock will accelerate. How would this be taxed as part of my estate?      Restricted Stock: Taxes Advanced How Tax Rate Changes Impact Strategies For Stock Options & Restricted Stock (Part 1)  Reporting Company Stock Sales Restricted Stock: Tax, Financial, Estate, And Retirement Planning (Part 2)  Decisions At Grant With Restricted Stock (Part 3): Analyze Your Alternatives  Taking An Overseas Assignment: Stock Compensation For Mobile Employees  I received a notice (CP-2000) from the IRS stating that, according to last year's tax return, I owe money for the sale of my restricted stock when it vested. I thought I paid all the taxes through withholding at vesting. How do I reply?  What are some year-end strategies for stock options, stock appreciation rights, and restricted stock?  The value of my restricted stock has fallen since vesting. If I sell my shares at year-end, do I get a credit for the income tax I paid at vesting, or do I net the loss against capital gains?  I acquired stock from 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?  Will my income from restricted stock vesting be netted against my short-term capital losses from this year (or those that were carried forward from last year)?  What are the biggest mistakes related to restricted stock I can make on my tax return, and how can I avoid them?  Schedule D diagram! How do I report a sale of restricted stock on my federal income-tax return?  Schedule D diagram! Do I need to report on my Schedule D the restricted stock I sold or surrendered to my company for the tax withholding?  Schedule D diagram! When I hold restricted stock after it vests and later have capital gains on the sale, will I get any "credit" for the income tax I paid at vesting?  What is a lapse election, and why do I need to make it before the restricted stock or restricted stock units vest?  What is the tax treatment of my restricted stock in an acquisition?  UPDATED! Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?  My new company withheld Social Security tax from my wages even though I "maxed out" on these taxes this year from my stock option exercise and restricted stock vesting at my prior employer. Can I get a refund or a credit on my tax return?  How soon after my restricted stock vests must the IRS receive my withholding taxes?  May I have my employer withhold more taxes upon the vesting of my restricted stock than the minimum required amount?  When my restricted stock vests, will I need to make estimated tax payments?  Are there any strategies for paying estimated taxes on income from stock options and restricted stock?  UPDATED! 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?  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?  I'm no longer an employee, so why is there withholding on my restricted stock vesting?  I may leave my company to become a consultant, retire, or take another job. Will taxes still be withheld on my NQSOs, SARs, and/or restricted stock as they were when I was an employee? What if I live in another state when I exercise them?  I have started receiving Social Security retirement payments. If I exercise stock options or my restricted stock vests, must I still pay Social Security tax on the income? Can this cause my Social Security payments to be taxed too?  Why has my restricted stock grant been taxed when I am merely eligible for vesting acceleration at retirement but I have not actually retired?  In what ways can I pay my taxes if I don't have the money to pay them with my tax return?  The value of my restricted stock at vesting is reported on my W-2 as ordinary income. Can I use my stock-trading losses to offset this income?  Is the vesting of my restricted stock a "wash sale"?  How are shares of company stock that I received from prior option exercises or restricted stock vesting valued for federal estate-tax purposes after my death?  If I die, the vesting of my restricted stock will accelerate. How would this be taxed as part of my estate?  At death, do tax withholding and reporting apply to restricted stock if the vesting is accelerated or allowed to continue?  What are the federal income tax consequences if my estate or beneficiary sells stock that I had received from a prior option exercise or from restricted stock vesting?  UPDATED! Does the accelerated vesting of my stock options, restricted stock, and/or performance shares in a change of control or termination have any tax impact on me, such as for ISOs and golden parachute payments?  If my restricted stock vests during a blackout period, or if the stock sale on the vest date would trigger Section 16 short-swing profit liability, is the tax treatment delayed until a later date?  UPDATED! Will my company be able to take a tax deduction for the value of my restricted stock, restricted stock units, performance shares, or stock options if my compensation already exceeds $1 million?      Restricted Stock: Section 83(b) Decisions At Grant With Restricted Stock (Part 2): The 83(b) Election Risks  Decisions At Grant With Restricted Stock (Part 3): Analyze Your Alternatives  How do I make a timely and complete Section 83(b) election?  Is a Section 83(b) election taxing you on the value of restricted stock at grant ever revocable? Can it be rescinded?  My restricted stock never vested because I left my company, but I paid taxes on the stock at the time of grant. Can I recover the taxes that I paid with the 83(b) election or claim some other deduction?  Can I make a Section 83(b) election for just part of my restricted stock grant?  Can I make a Section 83(b) election for a grant of restricted stock units (RSUs)?  Can my company file my Section 83(b) election for me?  NEW! Can my company prohibit me from making a Section 83(b) election on my restricted stock grant?  If I make a Section 83(b) election to be taxed on the value of my restricted stock at grant, can I sell shares or have my company withhold shares to pay the taxes?  By the time my restricted stock vested the price had dropped from the market price at grant. But I elected to pay taxes on the stock value at the time of grant. Can I recover the taxes that I paid with the Section 83(b) election?  SARs     SARs: Basics What You Need To Know About Stock Appreciation Rights (SARs): Part 1  What are stock appreciation rights (SARs), and how are SARs taxed?  Does all the stock option content on this website also apply to stock appreciation rights (SARs)?  UPDATED! What do examples and surveys show about the effects mandatory expensing is having on my stock grants?  Why are many companies considering stock appreciation rights (SARs) as an alternative to stock options?  Are stock appreciation rights (SARs) a better deal for me than stock options?  How do stock appreciation rights (SARs) differ from stock options, restricted stock, and RSUs?  How do I exercise stock appreciation rights?  How does a stock split affect my stock appreciation rights?  What specific provisions should I know about my SARs grant?  Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise?  Are there any special securities law issues and filing requirements with stock appreciation rights (SARs) for senior executives and directors?  How does a court determine whether my soon-to-be-former spouse should receive any part of my stock grant?  What is a "phantom stock plan"?      SARs: Taxes What You Need To Know About Stock Appreciation Rights (SARs): Part 2  Reporting Company Stock Sales Does all the stock option content on this website also apply to stock appreciation rights (SARs)?  What are stock appreciation rights (SARs), and how are SARs taxed?  What are some year-end strategies for stock options, stock appreciation rights, and restricted stock?  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?  W-2 diagram! What will my W-2 show after I exercise stock appreciation rights?  Schedule D diagram! How do I report sales of stock appreciation rights on my federal income-tax return?  I acquired stock from 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?  UPDATED! Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?  What is the tax impact on me if my company modifies outstanding stock options or SARs, such as by extending the option term?  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?  I'm no longer an employee, so why is there withholding on my NQSO or SARs exercise?  If I exercise stock appreciation rights (SARs), will I need to make estimated tax payments?  Does the tax-withholding rate for supplemental income differ for amounts less than $1 million and for amounts over $1 million?  I may leave my company to become a consultant, retire, or take another job. Will taxes still be withheld on my NQSOs, SARs, and/or restricted stock as they were when I was an employee? What if I live in another state when I exercise them?  Financial Planning     Financial Planning: Strategies Ten Financial Planning Rules Everyone With Stock Options Needs To Know  How To Avoid The Most Common Stock Option Mistakes (Part 1)  How To Avoid The Most Common Stock Option Mistakes (Part 2)  Stockbrokers' Secrets (Part 4): What I Tell My Best Clients About Down-Market Strategy  Restricted Stock: Tax, Financial, Estate, And Retirement Planning (Part 1)  Retirement Planning With Your Stock Options And Other Stock Compensation (Part 1: Pre-Retirement Planning)  Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation  Stock Option Fundamentals (Part 1): Know Your Goals And Terms  Employee Stock Purchase Plans & Your Financial Planning (Part 1)  Employee Stock Purchase Plans & Your Financial Planning (Part 2)  Stockbrokers' Secrets (Part 1): What I Tell My Best Clients About Stock Option Strategy  Stockbrokers' Secrets (Part 2): What I Tell My Best Clients About Stock Option Strategy  How The Bush Tax Cuts Still Affect Your Stock Option Planning  A Financial Advisor's View Of Your Stock Plans  Getting The Most From Your Stock Options  Psychological Factors Affect Your Stock Option Exercise Decisions  Lessons In Sitting Pretty Options: Have An Exit Plan Taking Stock Of Options I have various stock option grants with vested options. Do I need to exercise first my oldest grants or my oldest vested options?  I have vested stock options. What should I do: exercise and hold, exercise and immediately sell, or wait to exercise?  I have more than one stock option grant, and they are at different exercise prices. Which one should I exercise first?  I have both in-the-money and underwater options. If I exercise them all and immediately sell the stock, can I offset the gains with the losses on the underwater options?  Are there financial strategies for NQSOs?  My company's stock price recently fell dramatically, but I expect it to rise again soon. Are there any NQSO strategies (or mistakes to avoid) in a market upturn?  I plan to exercise options for stock that pays dividends. Are there any exercise strategies or at least mistakes to avoid?  What provisions in the 2003 tax law still affect my stock option strategy?  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?      Financial Planning: Advanced Strategies How Tax Rate Changes Impact Strategies For Stock Options & Restricted Stock (Part 1)  In Their Own Words: Financial Advisors On Company Stock Strategy For The Market Downturn  When To Wait, Hold, Or Sell: A Wealth Manager Reveals His Wisdom On Stock Option Exercise Strategy (Part 1)  When To Wait, Hold, Or Sell: A Wealth Manager Reveals His Wisdom On Stock Option Exercise Strategy (Part 2)  ESPP Choices: Flip Or Hold? (Part 2)  How To Develop A Stock Option Exercise Strategy To Reach Your Financial Goals (Part 1)  How To Develop A Stock Option Exercise Strategy To Reach Your Financial Goals (Part 2): Understand Risk Versus Return  Options For Your Options: Generating Income From Your Vested Employee Stock Options Without Exercising  Restricted Stock & Trends In Equity Compensation: What Financial Advisors Need To Know  Retirement Planning With Your Stock Options And Other Stock Compensation (Part 2: Retirement Year)  Retirement Planning With Your Stock Options And Other Stock Compensation (Part 3: Post-Retirement Planning)  Stock Option Valuation And Your Exercise Strategy  Stock Option Financial Planning After Your Tax Return Is Filed And At Year-End (Part 1)  Refundable AMT Credit (Part 2): The Calculation  Employee Stock Purchase Plans & Your Financial Planning (Part 2)  Better Late Than Never: Stock Option Strategy For The Market Upturn  Restricted Stock: Tax, Financial, Estate, And Retirement Planning (Part 2)  Decisions At Grant With Restricted Stock (Part 3): Analyze Your Alternatives  Decisions At Vesting With Restricted Stock (Part 2): Hold Or Fold?  Stock Option Financial Planning After Your Tax Return Is Filed (Part 2)  Sunk By Options 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?  Can you calculate whether it is better to be granted stock options or restricted stock?  What are price and time targets for stock option exercises and sales of company stock?  My company pays an attractive dividend. Assuming I hold the stock long enough, my dividends and capital gains are now taxed at 15%. Should I exercise and hold my NQSOs instead of just waiting to exercise near the end of the option term?  Are there any stock-option strategies for using my capital-loss carry-forwards?  What is a concentrated stock position, and what can I do to protect myself and get cash for other purposes?  Is there a way to defer taxation when I sell company stock?  UPDATED! Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?  Are there any strategies for paying estimated taxes on income from stock options and restricted stock?  What ISO strategies can help minimize AMT liability?  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?  What is a Rule 10b5-1 trading plan?      Financial Planning: Diversification How To Diversify Your Company Stock Holdings While Leveraging The Wealth In Your Stock Options  Stockbrokers' Secrets (Part 5): What I Tell My Best Clients About Company Stock Diversification  Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation  Too Much Of A Good Thing Defying Diversification Employee Stock Options Planning Remains Confusing How To Value Your Stock Options The Risks And Rewards Of Company Stock Lessons Of A Bear Market Don't Bet It All On One Stock What are the risks of owning stock?  When should I sell my company stock?  How do I diversify my company-stock holdings?  UPDATED! 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?  I believe strongly in company-stock ownership and its wealth-building potential, yet I need to diversify. I have both substantial company stock and in-the-money vested options. What should I consider when deciding whether to sell existing stock or whether to exercise options and immediately sell that stock in a cashless exercise?  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?  What is a concentrated stock position, and what can I do to protect myself and get cash for other purposes?  I want to set up a program with my company and broker in which I automatically exercise options and sell stock to pay a regularly expected bill as it's received, such as my child's tuition. Can this prearranged selling plan violate insider trading laws and my company's blackout rules?      Financial Planning: High Net Worth How Tax Rate Changes Impact Strategies For Stock Options & Restricted Stock (Part 1)  Options For Your Options: Generating Income From Your Vested Employee Stock Options Without Exercising  Hedging Your Employee Stock Options (Part 1)  Hedging Your Employee Stock Options (Part 2)  Taking An Overseas Assignment: Stock Compensation For Mobile Employees  Hedging Your ISO Stock  Strategies For Hedging Concentrated Stock Positions (Part 1)  Strategies For Hedging Concentrated Stock Positions (Part 2)  Strategies For Hedging Concentrated Stock Positions (Part 3)  Negotiating And Structuring Your Stock Compensation (Part 1): Key Documents  Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies  Converting Your Stock Option Spread Into Nonqualified Deferred Compensation  Techniques To Defer Or Reduce Taxes On The Sale Of Your Company's Shares (Part 1): QSB Stock  Sophisticated Techniques To Defer Or Reduce Taxes On The Sale Of Your Company's Shares (Part 2): SSBICs  Execs Pay It Forward—To Themselves The State Of Executive Pay Overexposed A Hidden Bull-Market Scandal Comes To Light Defying Diversification IRS Guide To Auditing Techniques For Stock-Based Compensation (02-2005) NEW! Does the US have an exit tax?  What is restricted stock? Does it differ from restricted securities?  What is a concentrated stock position, and what can I do to protect myself and get cash for other purposes?  What is a Rule 10b5-1 trading plan?  I want to set up a program with my company and broker in which I automatically exercise options and sell stock to pay a regularly expected bill as it's received, such as my child's tuition. Can this prearranged selling plan violate insider trading laws and my company's blackout rules?  Are senior executives and directors banned from trading company stock during a 401(k) blackout period?  Can I sell my company stock through a blind trust, or another type of trust, as a defense against insider trading?  UPDATED! Can I put NQSOs or company stock into a charitable remainder trust or a grantor-retained annuity trust?  Can stock options be transferred or gifted to people or charities after I get them?  UPDATED! 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 enter into a hedging transaction in my company stock, as a senior executive do I need to report this to the SEC on Form 4?  If I hedge my company stock (for example, by selling calls on it), will the dividends qualify for the special 15% tax rate?  Is writing call options on, or buying put options for, my ISO stock a disqualifying disposition?  UPDATED! What is a "reload" or "restoration" option? How common are they in stock plans?  How can a reload option help me?  Is it possible to defer the gains on an NQSO exercise by having the shares delivered in a later tax year?  Can my company lend me money to buy its stock or pay for taxes on restricted stock at vesting? Can it later cancel or modify that debt?  Do federal securities laws impose any reporting requirements on a public company's officers, directors, and significant stockholders?  UPDATED! 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?  If I am no longer an officer or director of a public company, do I still need to meet the requirements of Rule 144 to sell my company stock?  My company's stock price has substantially dropped. As an executive, I want to buy the stock on the open market to show confidence to investors and analysts. Do I still need to worry about insider trading and liability for short-swing profits under Section 16?  Can I sell my options to a family trust or a family partnership to defer taxes? Are there other strategies to defer the gain on nonqualified stock options other than the deferred delivery of the shares?  As a director, can I elect to take part of my retainer as "deferred stock units"?  UPDATED! Does the American Jobs Creation Act, particularly Section 409A on deferred compensation, affect my stock grants?  UPDATED! Will my company be able to take a tax deduction for the value of my restricted stock, restricted stock units, performance shares, or stock options if my compensation already exceeds $1 million?      Financial Planning: Estate Planning Charitable Remainder Trusts (CRTs) And Your Company Stock (Part 1)  Charitable Remainder Trusts (CRTs) And Your Company Stock (Part 2)  Charitable Remainder Trusts (CRTs) And Your Company Stock (Part 3)  Gifts: Save On Estate Taxes With Transferable Stock Options  Retirement Planning With Your Stock Options And Other Stock Compensation (Part 3: Post-Retirement Planning)  Death, Taxes, & Opportunity In A Down Market School Gifts That Skip Uncle Sam Estate Tax: What Repeal? With A Couple Of Million, You Could Do A Lot Of Good: How To Set Up A Family Foundation Can I name a beneficiary for my stock options, ESPPs, stock appreciation rights, or restricted stock?  Can stock options be transferred or gifted to people or charities after I get them?  Can I transfer or pledge restricted stock before vesting?  UPDATED! Can I put NQSOs or company stock into a charitable remainder trust or a grantor-retained annuity trust?  What is the tax treatment for gifts of company stock?  Can I sell my options to a family trust or a family partnership to defer taxes? Are there other strategies to defer the gain on nonqualified stock options other than the deferred delivery of the shares?  Can I sell my company stock through a blind trust, or another type of trust, as a defense against insider trading?  Can ISOs be transferred to a grantor trust?  Why would I transfer stock options to a living trust? What is the tax impact?  Does the post-death exercise period begin to run on the day after my death or only when my administrator, executor, or heir has authority to exercise the options?      Financial Planning: Gifts Donating Your Company Stock To Charities And Private Foundations (Part 1)  Gifts: Save On Estate Taxes With Transferable Stock Options  Charitable Remainder Trusts (CRTs) And Your Company Stock (Part 1)  When Giving Means Getting Back: The Tax Advantages Of Donating Stock What is the tax deduction for donations of my company stock?  What is the tax treatment for gifts of company stock?  Can stock options be transferred or gifted to people or charities after I get them?  UPDATED! Can I put NQSOs or company stock into a charitable remainder trust or a grantor-retained annuity trust?  Can I exercise my stock options, soon thereafter donate the shares to charity, and get a tax deduction for the stock's new higher price?  Can I donate shares and then immediately buy the same number of shares on the open market?  If I exercise my NQSO and immediately donate the shares to charity, do I still need to pay the taxes on the spread at exercise?  Is the gifting or donation of stock that I acquired from an ISO exercise or ESPP purchase a disqualifying disposition? What is the tax treatment for early sale?  If I gift stock that has met the holding periods for Section 423 ESPPs, what is the tax treatment?  When I gift stock from an incentive stock option exercise/hold that triggered AMT, do I get an adjustment for it on my AMT return?  UPDATED! Do Rule 144 and Section 16 apply to gifts and donations of company stock by senior executives or directors?      Financial Planning: Dividends How Dividends Impact Your Strategy For Stock Options And Restricted Stock (Part 1)  How Dividends Impact Your Strategy For Stock Options And Restricted Stock (Part 2)  When To Wait, Hold, Or Sell: A Wealth Manager Reveals His Wisdom On Stock Option Exercise Strategy (Part 1)  IRS Publication 550: Investment Income And Expenses The Torture Of The Dividend Tax IRS Eases Dividend Rules D'oh! The Qualified Dividend Glitch How does a dividend affect the value of stock options, restricted stock, and restricted stock units?  Are qualified dividends included in the AMT calculation?  Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise?  I plan to exercise options for stock that pays dividends. Are there any exercise strategies or at least mistakes to avoid?  How are the dividends on restricted stock taxed and reported to me?  Do I receive dividends on unvested restricted stock and have voting rights?  Do I get dividends with restricted stock units (RSUs)? How are they taxed?  UPDATED! Can I reinvest my restricted stock dividends in more company stock instead of taking cash income now?  Does receiving dividend payments on my restricted stock before it vests mean I automatically get the stock even if I leave the company before vesting?  When does my holding period for the special tax rate on dividends begin? At exercise or vesting?  My company pays an attractive dividend. Assuming I hold the stock long enough, my dividends and capital gains are now taxed at 15%. Should I exercise and hold my NQSOs instead of just waiting to exercise near the end of the option term?  Both dividends and long-term capital gains are now taxed at the same rate. Can I net my dividends from my company stock against capital loss from the sale of company stock or another security?  If I hedge my company stock (for example, by selling calls on it), will the dividends qualify for the special 15% tax rate?  If my brokerage firm lends my dividend-paying company shares while I have a margin loan, will the dividends qualify for the special 15% tax rate?  If I borrow money to exercise my options, can I deduct the interest payments against dividend income from my company stock?      Financial Planning: Year-End Planning In Their Own Words: Financial Advisors On Company Stock Strategy For The Market Downturn  Stockbrokers' Secrets (Part 3): What I Tell My Best Clients About Year-End Planning  How Tax Rate Changes Impact Strategies For Stock Options & Restricted Stock (Part 1)  Ten Ideas For Year-End Tax Planning With Stock Options And Company Stock  Year-End Tax & Financial-Planning Issues For Employees  Stock Option Financial Planning After Your Tax Return Is Filed And At Year-End (Part 1)  The ISO Tax Trap And The AMT Credit Myth: What To Do Before Exercise And At Year-End  Advisors To Clients: Prepare For Likely Tax Increases A Tough Tax Row To Hoe Financial Planning: What Higher Taxes Could Mean Death, Taxes, & Opportunity In A Down Market Now Is The Time To Exercise ISOs Your Year-End Personal-Finance Checklist What are some year-end strategies for stock options, stock appreciation rights, and restricted stock?  For NQSOs or SARs exercised on the last business day of 2008, or for restricted stock that vests on that day, is the income taxable in 2008 or 2009?  At the end of the year, should I exercise my in-the-money options and sell the stock to take advantage of netting the gains against my short-term capital losses from this year (or those that were carried forward from last year)?  Are there any stock-option strategies for using my capital-loss carry-forwards?  The value of my restricted stock has fallen since vesting. If I sell my shares at year-end, do I get a credit for the income tax I paid at vesting, or do I net the loss against capital gains?  Will my income from restricted stock vesting be netted against my short-term capital losses from this year (or those that were carried forward from last year)?  Are there any strategies for paying estimated taxes on income from stock options and restricted stock?  At year-end, is there any general way to determine how many ISOs I can exercise and hold before triggering AMT?  What ISO strategies can help minimize AMT liability?  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?  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?  Earlier in the year, I exercised ISOs, held the stock, and had a big spread from the market price that will trigger AMT. But my company's stock price has dropped below my exercise price. Can I eliminate AMT and even claim a tax loss?  Job Events     Job Events: Job Search and Negotiation Negotiating And Structuring Your Stock Compensation (Part 1): Key Documents  Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies  Stock Option Terms: What You Can Expect  Understanding The Risks In Your Pre-IPO Stock Options (Part 1)  How Does Your Company's Stock Plan Compare? (Part 1)  How Does Your Company's Stock Plan Compare? (Part 2)  Your Stock Grants May Come With Strings Attached  The State Of Executive Pay Picture Improves For Private-Company Pay Working For A Piece Of The Action Workers Give Up Get-Rich Dreams, Still Value Stock Options A Software Developer's Guide To Stock Options What is the likelihood of receiving a new-hire or periodic stock grant? Are there survey data or common practices?  Are stock option and restricted stock grants negotiable? What terms are negotiable at hire?  Does service with a previous employer ever count toward vesting?  Do employers ever issue additional options or restricted stock to replace grants that were forfeited at a previous employer?  Can I negotiate faster vesting later while I am working for the company?  How does a "clawback" work to take away stock grant gains?  How common are clawback provisions?  Can I protect myself from dilution and liquidity preferences in my pre-IPO company?      Job Events: Hiring Negotiating And Structuring Your Stock Compensation (Part 1): Key Documents  Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies  Taking An Overseas Assignment: Stock Compensation For Mobile Employees  What Are My Stock Options Worth?  Stock Grant Sizes In Pre-IPO Tech Companies  Picture Improves For Private-Company Pay Why Stock Options Still Rule Avoiding The Dot-Bomb: Do Your Homework Before Applying For A Job At An Internet Startup Is it better to be granted nonqualified stock options (NQSOs) or incentive stock options (ISOs)?  What guidelines do employers use to determine how many stock options or restricted shares to grant?  Can I have the exercise price of a new stock option grant lowered or backdated?  How much are my options worth at grant?  How do I know whether I am being granted my fair share of stock options? Are grant guidelines available publicly so that I can compare my grant to others in my and different industries?  What should I do if I feel that I have been granted too few options?  Do employers ever issue additional options or restricted stock to replace grants that were forfeited at a previous employer?  Can my employer give me a choice of stock options, restricted stock, or cash?  What does it mean when someone says that employee stock options have both face (or intrinsic) value and time value?  Does service with a previous employer ever count toward vesting?  Can the terms of my severance accelerate vesting or give me a longer period to exercise my options?  How common are noncompete provisions in stock grants? What activities can trigger a noncompete provision?  How does a "clawback" work to take away stock grant gains?  How common are clawback provisions?      Job Events: Termination Negotiating And Structuring Your Stock Compensation (Part 1): Key Documents  Stock Option Terms: What You Can Expect  Prepare Cushion For Layoffs If You're Laid Off, Be Sure To Know Your Stock Options What happens if I terminate my employment before an option grant is fully vested?  Do I forfeit my restricted stock if I leave the company before vesting?  I am leaving my job. Is my company required to tell me how many vested options I have, how long I can exercise them after I leave, or when they expire?  I am planning to leave my job. Do stock options stop vesting when I give notice or on the actual date of termination?  My company recently went through layoffs. What rights do involuntarily terminated employees have in their stock options, and what may my company do?  Can I be fired when I am about to vest in company stock options or restricted stock/RSUs?  I'm no longer an employee, so why is there withholding on my NQSO or SARs exercise?  I'm no longer an employee, so why is there withholding on my restricted stock vesting?  Can the terms of my severance accelerate vesting or give me a longer period to exercise my options?  How long do I have to exercise my vested stock options after my employment ends?  UPDATED! What are the most common periods after termination during which stock options can be exercised? Does the reason (e.g., disability, early retirement) matter?  If my employment agreement gives me longer after termination to exercise my stock options than the stock plan and grant agreement do, which controls?  What is the tax impact on me if my company modifies outstanding stock options or SARs, such as by extending the option term?  Does the reason for my termination affect vesting?  According to surveys, how are unvested stock options most commonly treated upon various types of termination?  Does the severance-pay period extend the clock for post-termination exercise?  When I am still working at my company, can it rescind or cancel my outstanding stock options or restricted stock before vesting instead of firing me?  Does receiving dividend payments on my restricted stock before it vests mean I automatically get the stock even if I leave the company before vesting?  If I remain with the company for the duration of the vesting schedule, is there any way I can lose the benefit of my option?  When I am no longer with my company (e.g., because of job loss or disability), will tax-law limits or deadlines dictate when I must exercise an ISO?  Do special rules determine when a leave of absence is a termination of employment for the purposes of ISOs?  My company allows me to exercise my ISOs more than 90 days after I leave my job. What is the tax treatment at exercise?  If I leave the company, what happens to the money that has been deducted from my paycheck to purchase ESPP shares?  Can I violate the insider trading or Section 16 rules after I leave the company by exercising my options and selling the shares?  Must I still file Form 4 for my company stock purchases and sales after I leave the company? Do the rules for matching short-swing profits still apply?      Job Events: Consultants and Contractors Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies  Can consultants or independent contractors be granted stock options or company stock? How common is this practice?  What happens to my stock options if I switch from employee to consultant?  Are there any rules of thumb for how many options consultants should receive on a project?  Are the tax rules and withholding for NQSOs different if I am an independent contractor, consultant, or outside director and not an employee?  Are the tax rules for restricted stock different if I am an independent contractor, a consultant, or an outside director and not an employee?  Can independent contractors, consultants, or outside directors be granted ISOs?  Do the terms in option grant agreements to consultants differ from the terms in employee grant agreements?  What are the special issues with options granted to consultants that I need to consider in negotiating my agreement with the company?  Are consultant stock options subject to vesting schedules?  How does the vesting of stock options for consultants and contractors differ from the vesting of grants to employees?  How do I know whether I am still "consulting" or "rendering services" for purposes of vesting and exercisability of options?  When my consulting project ends, what should I do to ensure that I get my options or stock? How do I prevent losing my options?  I just heard that the company I did consulting work for is about to go public or be acquired. What should I do about my options or stock?  Do securities laws and regulations place restrictions on stock options or shares granted to consultants and on their freedom to sell the stock?  I may leave my company to become a consultant, retire, or take another job. Will taxes still be withheld on my NQSOs, SARs, and/or restricted stock as they were when I was an employee? What if I live in another state when I exercise them?  Can a consultant use the proceeds from an NQSO exercise or restricted stock vesting to fund a Keogh or SEP?  Do advisory-board members usually receive stock options? Does this bear disadvantages for companies?  I am a consultant. If I have stock options in a pre-IPO company, do I have the right to receive financial statements or shareholder reports?  Can a private company contractually restrict my ability to resell my shares, or do the securities laws limit my ability to resell them?  If the stock I receive at exercise, at vesting, or outright from the company for services is not registered with the SEC and I cannot immediately sell it, is the date for determining the taxes delayed?  Life Events     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 1: Pre-Retirement Planning)  Retirement Planning With Your Stock Options And Other Stock Compensation (Part 2: Retirement Year)  Retirement Planning With Your Stock Options And Other Stock Compensation (Part 3: Post-Retirement Planning)  Switching From Offense To Defense Social Security: What's The Magic Age? Careful: Don't Blow Your Options The Stock Option Dream After I retire, will my company let my stock options or restricted stock continue to vest, or will it accelerate the vesting?  Do stock plans treat early retirement differently from ordinary retirement?  UPDATED! What are the most common periods after termination during which stock options can be exercised? Does the reason (e.g., disability, early retirement) matter?  If I leave my company to retire, will I have a longer period to exercise my vested options than I would if I left to take another job?  My post-retirement exercise period is longer than the remaining term of my stock options. Which term applies after I retire?  If I no longer work for my company because I retire, become a consultant, or leave to work for another company, will the procedure for exercising my options change?  I worked in one state but have retired to another, where I plan to exercise my stock options. Will I be taxed by the state I worked in when I received the grant or by my new state?  I may leave my company to become a consultant, retire, or take another job. Will taxes still be withheld on my NQSOs, SARs, and/or restricted stock as they were when I was an employee? What if I live in another state when I exercise them?  Why has my restricted stock grant been taxed when I am merely eligible for vesting acceleration at retirement but I have not actually retired?  How does my stock option exercise or restricted stock vesting affect the annual earnings limit of Social Security?  When should I start taking Social Security benefits?  I have started receiving Social Security retirement payments. If I exercise stock options or my restricted stock vests, must I still pay Social Security tax on the income? Can this cause my Social Security payments to be taxed too?      Life Events: Retirement Plans Retirement Planning With Your Stock Options And Other Stock Compensation (Part 3: Post-Retirement Planning)  ESPP Choices: Flip Or Hold? (Part 2)  Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation  What is an "employee stock ownership plan"?  How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan?  Can stock options, restricted stock, or an ESPP affect my other employee benefits, such as 401(k) contributions?  Can I use company stock or cash in my 401(k) plan to exercise my stock options?  Can I use cash in my IRA account to exercise my options?  Can options be granted to my IRA instead of to me?  Can I sell my company stock to my IRA for cash or contribute my company stock to it?  Can stock option income alone qualify me to establish an IRA?  Does income from stock options affect my payments under disability policies or pension plans?  UPDATED! How do stock grants affect the income limits for contributing to a Roth IRA?  Does participating in an ESPP affect my ability to contribute to a 401(k) plan or IRA?  Can a consultant use the proceeds from an NQSO exercise or restricted stock vesting to fund a Keogh or SEP?  Can I commit insider trading by buying or selling company stock in my 401(k) when I know important, confidential information?  Are senior executives and directors banned from trading company stock during a 401(k) blackout period?      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)  School Gifts That Skip Uncle Sam The New Kiddie Tax Child's Play Tuition Magicians Twenty Questions About Paying for College 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?  I want to set up a program with my company and broker in which I automatically exercise options and sell stock to pay a regularly expected bill as it's received, such as my child's tuition. Can this prearranged selling plan violate insider trading laws and my company's blackout rules?      Life Events: Divorce I'm Getting Divorced: What Happens To My Stock Options? (Part 1)  I'm Getting Divorced: What Happens To My Stock Options? (Part 2)  I'm Getting Divorced: What Happens To My Stock Options? (Part 3)  Divorce, Taxation, And Stock Options Can Make Strange Bedfellows  Splitting Stock Options In A Divorce Protecting Your Interests During Divorce Divorce Agreement Language Divorce Guide: Who Gets The Stock Options? Unlocking The Golden Handcuffs Is my spouse entitled to part of my stock options and other stock grants upon our divorce?  How are stock options and restricted stock valued in divorce?  How are stock options treated in a "community property" state?  How are stock options treated in non-community-property states?  How does a court determine whether my soon-to-be-former spouse should receive any part of my stock grant?  When are stock options deemed to be acquired for purposes of division in a divorce proceeding?  Are stock options that were granted to me after my spouse and I separated but before the divorce is finalized subject to division in the divorce proceedings?  How do the terms of my employer's plan or my grant agreement affect whether my spouse can be awarded any of my stock options or restricted stock in a divorce?  What is a qualified domestic relations order (QDRO), and how can it be used to divide stock options and restricted stock in divorce settlements?  Does it matter whether the stock options are for past service or for future service?  Do courts use any rules of thumb to decide which stock options are marital property, and to divide stock options?  How are ISOs usually handled in divorce?  In a divorce case, how do you argue that underwater stock options have value?  How are stock options valued when I give my spouse money or other property instead of transferring the options?  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?  Are stock grants considered in determining child support and alimony payments?  Do I pay any taxes when stock options are transferred to my former spouse as a part of my divorce settlement?  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?  Who pays taxes when restricted stock or vested company shares are transferred in a divorce settlement? How is restricted stock handled in divorce?  Can an ISO be divided in a divorce?  In a divorce agreement, I am transferring to my former spouse ISO stock that has not met the holding period requirement. Is this a disqualifying disposition?  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?  Can proceeds from stock options be garnished to pay a creditor, an ex-spouse, or a tax authority?  In personal bankruptcy, can stock options be attached by creditors?      Life Events: Death Stock Options After Death: Learn Before It's Too Late (Part 1)  Stock Options After Death: Learn Before It's Too Late (Part 2)  Getting It Right What happens to my stock options if I die before I exercise them?  Does vesting automatically accelerate after death?  What are common periods that stock plans allow for exercising stock options upon death?  UPDATED! What are the most common periods after termination during which stock options can be exercised? Does the reason (e.g., disability, early retirement) matter?  Does the post-death exercise period begin to run on the day after my death or only when my administrator, executor, or heir has authority to exercise the options?  Can I name a beneficiary for my stock options, ESPPs, stock appreciation rights, or restricted stock?  After my death, what happens to any company shares that I own?  If I die, what will happen to my ESPP participation and the holding period rules?  Once my in-the-money options vest, are they mine forever?      Life Events: Death Taxes Charitable Remainder Trusts (CRTs) And Your Company Stock (Part 1)  Charitable Remainder Trusts (CRTs) And Your Company Stock (Part 2)  Charitable Remainder Trusts (CRTs) And Your Company Stock (Part 3)  Estate Tax: What Repeal? After my death, at what times might my stock options be taxed?  How would my stock options be taxed and valued for estate tax purposes upon my death?  How are shares of company stock that I received from prior option exercises or restricted stock vesting valued for federal estate-tax purposes after my death?  At death, the value of options is included in the gross estate for estate tax purposes. But what happens if the stock's value drops below the exercise price and the options expire unexercised?  What are the federal income tax consequences if my estate or beneficiary exercises nonqualified stock options (NQSOs) after my death?  What are the federal income tax consequences if my estate or beneficiary sells the NQSO stock it has exercised and held?  Do tax withholding and reporting apply to NQSOs exercised by the estate or beneficiary?  How does IRD or "income in respect of a decedent" apply to stock options and other stock grants?  When I am no longer with my company (e.g., because of job loss or disability), will tax-law limits or deadlines dictate when I must exercise an ISO?  What is the tax treatment of ISOs after death?  What would happen to my AMT credit at my death?  What is the tax treatment of ESPP shares at death?  If I die, the vesting of my restricted stock will accelerate. How would this be taxed as part of my estate?  At death, do tax withholding and reporting apply to restricted stock if the vesting is accelerated or allowed to continue?  What are the federal income tax consequences if my estate or beneficiary sells stock that I had received from a prior option exercise or from restricted stock vesting?  Why would I transfer stock options to a living trust? What is the tax impact?      Life Events: Disability What happens to my stock grants if I become temporarily disabled?  What happens to my stock options if I become permanently disabled?  How is "permanent disability" usually defined?  When I am no longer with my company (e.g., because of job loss or disability), will tax-law limits or deadlines dictate when I must exercise an ISO?  Are the disability rules the same for ISOs?  Does income from stock options affect my payments under disability policies or pension plans?  Do I receive vesting credit while I am on a leave of absence or a sabbatical?  Does the reason for my leave of absence or sabbatical affect vesting?  Does maternity leave stop my vesting?  UPDATED! What are the most common periods after termination during which stock options can be exercised? Does the reason (e.g., disability, early retirement) matter?  Do special rules determine when a leave of absence is a termination of employment for the purposes of ISOs?  M&A     M&A: Basics My Company's Being Acquired: What Happens To My Stock Options? (Part 1)  The Acquisition: All's Well That Ends Well?  I see many different terms used to describe corporate transactions. What is the difference between a merger, an acquisition, and a divestiture?  How is the method for treating stock options in a merger or acquisition determined?  What is a "lockup"?  How might the terms of my company's stock plan or my grant agreement affect the treatment of my options and restricted stock if my company were acquired?  What affects the willingness of a buyer to cash out or convert the seller's options other than the deal's tax structure?  How can I find out how much I will make from an acquisition of my company?  If my company is bought for stock of the acquirer, will I be able to purchase the same number of shares in the buyer as I am allowed to with my current options and restricted stock?  What happens if our company's stock price or the acquirer's stock price fluctuates before the acquisition is completed?      M&A: Impact My Company's Being Acquired: What Happens To My Stock Options? (Part 1)  My Company's Being Acquired: What Happens To My Stock Options? (Part 2)  Understanding The Risks In Your Pre-IPO Stock Options (Part 1)  Private Equity Transactions: Understanding Some Fundamental Principles What will happen to my vested stock options if my employer is acquired by another company?  What will happen to my unvested stock grants if my company is acquired or if it merges with another company?  NEW! A private equity firm is buying my company. What will happen to my stock options and restricted stock?  In an acquisition, what happens to my underwater stock options?  What happens to my stock options in a part-cash, part-stock deal?  According to the terms of the acquisition, all my stock options will be converted to those of the buyer. How do I ascertain the number of options I will have and the exercise price?  My company is selling the small division I work for. I will no longer work for the company but will still have the same job, with new corporate owners of my division. What will happen to my options in the divestiture?  UPDATED! Can an acquisition of my company accelerate the vesting of my stock options?  How do "change of control" provisions in stock plans generally work to accelerate vesting?  How will I know that a change of control has occurred?  What portion of unvested options is normally accelerated in a change of control?  Once acceleration of vesting has occurred, how long do I have to exercise my newly vested stock options in the seller?  After the acquisition is completed, can I immediately sell the shares I receive in the buyer?  Will I be awarded additional stock options or restricted stock before an acquisition transaction is completed?  What happens to my ESPP when my company is acquired?  In an acquisition, what happens to money that has been waiting to purchase shares in my ESPP?  What happens to my stock options if my company acquires another business?  My company is private. Should I exercise my stock options before the acquisition of my company is completed?  I just heard that the company I did consulting work for is about to go public or be acquired. What should I do about my options or stock?      M&A: Taxes My Company's Being Acquired: What Happens To My Stock Options? (Part 3)  What's the tax treatment of my stock options in an acquisition?  What is the tax treatment of my restricted stock in an acquisition?  How can tax consequences to the buying and selling companies in an acquisition affect the treatment of my stock options?  UPDATED! Does the accelerated vesting of my stock options, restricted stock, and/or performance shares in a change of control or termination have any tax impact on me, such as for ISOs and golden parachute payments?  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?  In an upcoming merger, the acquirer will pay cash for my outstanding NQSOs and ISOs. Can I avoid some of the Social Security and Medicare taxes by exercising vested options now?  Can the annual limit of $100,000 in exercisable ISOs be adversely affected by any post-grant events, such as job termination or the acceleration of vesting in a merger?  I exercised ISOs and am hoping to wait 12 months before selling to get the favorable ISO tax treatment. What happens in a cash M&A deal when I'm trying for the one-year holding-period mark but the buyer pays cash for the stock? Is there any way around incurring a disqualifying disposition?  I bought stock in my company's ESPP and am hoping to wait 12 months before selling to get the favorable ESPP tax treatment. What happens in a cash M&A deal when I am trying to reach the one-year holding-period mark but the buyer pays cash for the stock before then? Is there any way around a disqualifying disposition?  SEC Law     SEC Law: Basics UPDATED! What is insider trading? Do you have to be an "insider" or executive to commit it?  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?  Are sales of shares by executives and directors of a public company subject to any securities-law restrictions?  What are Forms 3, 4, and 5? When are they filed with the SEC?  What are the requirements that affiliates (i.e., executives or directors) must follow to sell their stock to the public under Rule 144?  What are "blackout periods" and "window periods"?  If the stock I receive at exercise, at vesting, or outright from the company for services is not registered with the SEC and I cannot immediately sell it, is the date for determining the taxes delayed?  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?  Are senior executives and directors banned from trading company stock during a 401(k) blackout period?  UPDATED! Can the SEC take away stock option gains, restricted stock, and performance shares after accounting fraud has occurred?  I am an affiliate. I plan to exercise my options and sell the shares. What forms do I file with the SEC, and when?  If I am an "affiliate" of my company, how difficult is it to register my stock for resale to the public?  Do federal securities laws impose any reporting requirements on a public company's officers, directors, and significant stockholders?  Are there special public-company notice requirements for senior executives or directors before they exercise and sell?      SEC Law: Insider Trading Prevent A Martha Stewart Moment: Insider Trading In Your Company's Stock  How Executives And Directors Can Avoid SEC Troubles Before Trading Their Company Stock (Part 1)  Insider Trading Prevention & Education  Elevated Enforcement Insider Trading Makes Comeback In Options 20 Years After Boesky Insider Trading Inside Out UPDATED! What is insider trading? Do you have to be an "insider" or executive to commit it?  What is insider tipping?  Why are insider trading and tipping illegal?  Does it matter whether the person who violates the insider-trading laws lives outside the US?  Do the rules of insider trading and tipping apply only in business contexts? Do they also apply to what I tell friends and family?  What if at the time of sale I possessed inside information that did not affect my decision to sell? For example, what if I decided months before to exercise and sell stock when the stock price reached a certain point?  My company's stock price has substantially dropped. As an executive, I want to buy the stock on the open market to show confidence to investors and analysts. Do I still need to worry about insider trading and liability for short-swing profits under Section 16?  UPDATED! Aren't my stock-trading records confidential? How could the stock exchanges and the SEC get them and other information about me?  Will the SEC really investigate and prosecute small insider-trading violations?  Do I need to be caught in the act to be investigated or prosecuted?  Is lying during an SEC investigation a crime?  How do civil and criminal insider-trading cases differ?  What are the civil penalties for insider trading?  What are the criminal penalties for insider trading?  UPDATED! Can a grant of stock options be an insider trading violation?  Can the exercise of stock options be an insider trading violation?  If I know something important about our company or another one, when can I use that information to trade? Does the window period always tell me when?  What are "blackout periods" and "window periods"?  How do blackout periods affect stock option exercises and the tax treatment?  How do blackout periods affect my ability to sell shares?  Can I violate the insider trading or Section 16 rules after I leave the company by exercising my options and selling the shares?  If my restricted stock vests during a blackout period or when I know secret stock-price-moving information, can I be charged with insider trading?  Can I commit insider trading by buying or selling company stock in my 401(k) when I know important, confidential information?  Does insider trading include buying stock in a supplier or a customer of my company and not in my own company?  Can an insider-trading violation bar me from serving as an officer or director?  Can I receive a bounty for providing information about someone who trades on inside information?  Can I sell my company stock through a blind trust, or another type of trust, as a defense against insider trading?      SEC Law: Rule 10b5-1 Trading Plans How To Use Rule 10b5-1 Trading Plans To Sell Company Stock (Part 1)  How To Use Rule 10b5-1 Trading Plans To Sell Company Stock (Part 2)  How Executives And Directors Can Avoid SEC Troubles Before Trading Their Company Stock (Part 1)  Elevated Enforcement The SEC Is Eyeing Insider Stock Sales Rule Change Will Make It Easier For Insiders To Make Legal Trades: New SEC Regulation [On Insider Trading] Is Little Known But Could Have Big Impact I want to set up a program with my company and broker in which I automatically exercise options and sell stock to pay a regularly expected bill as it's received, such as my child's tuition. Can this prearranged selling plan violate insider trading laws and my company's blackout rules?  What is a Rule 10b5-1 trading plan?  What are best practices for Rule 10b5-1 trading plans?  How widely used are Rule 10b5-1 trading plans? Is information about their use available?  How long do Rule 10b5-1 trading plans last?  Can I make trades in company stock outside the Rule 10b5-1 plan?  UPDATED! Can my company force me to use a Rule 10b5-1 trading plan? Can it prohibit me from using one?  Is it possible to violate insider-trading laws by terminating or modifying my Rule 10b5-1 trading plan when I know material nonpublic information?  Can I sell my company stock through a blind trust, or another type of trust, as a defense against insider trading?  When I sell stock under a Rule 10b5-1 plan, do I report the sale differently on Form 4?  What will happen to my Rule 10b5-1 plan if I die?  How and when is Form 144 filed?  Should I set up a Rule 10b5-1 trading plan to cover the stock I will sell or surrender to pay withholding taxes when my restricted stock vests?  Must I suspend my Rule 10b5-1 plan if my stock trade date occurs during a sudden blackout period?  My company is private. Can I set up a Rule 10b5-1 trading plan now so that I may start selling after the IPO lockup period?  If I know something important about our company or another one, when can I use that information to trade? Does the window period always tell me when?  What are price and time targets for stock option exercises and sales of company stock?  What is a concentrated stock position, and what can I do to protect myself and get cash for other purposes?  Are there any special securities law issues and filing requirements with stock appreciation rights (SARs) for senior executives and directors?      SEC Law: Rule 144 How Executives And Directors Can Avoid SEC Troubles Before Trading Their Company Stock (Part 2)  What are the requirements that affiliates (i.e., executives or directors) must follow to sell their stock to the public under Rule 144?  For Rule 144 resale requirements, what is the difference between (1) restricted securities I own as a company officer or director that are not registered with the SEC and (2) company shares I bought on the open market?  UPDATED! Do the holding-period requirements under Rule 144 always apply to sales of company stock by affiliates and regular employees?  If I am no longer an officer or director of a public company, do I still need to meet the requirements of Rule 144 to sell my company stock?  What are the company-information requirements of Rule 144 that affect my stock sales?  How soon after an IPO can I sell my stock under Rule 144?  Does the period I held unexercised options count towards the holding period for resales of unregistered securities under Rule 144?  What are the volume limitations imposed on an affiliate under Rule 144?  How and when is Form 144 filed?  Do I still file Form 144 even though I have held the restricted securities long enough?  What regulations govern the sales activities of brokers under Rule 144?  How does an affiliate sell shares in a private resale?  After the acquisition is completed, can I immediately sell the shares I receive in the buyer?  UPDATED! Do Rule 144 and Section 16 apply to gifts and donations of company stock by senior executives or directors?  How do I have the legend removed from my restricted securities?  Do securities laws and regulations place restrictions on stock options or shares granted to consultants and on their freedom to sell the stock?  Are there any special securities law issues and filing requirements with stock appreciation rights (SARs) for senior executives and directors?      SEC Law: Section 16 How Executives And Directors Can Avoid SEC Troubles Before Trading Their Company Stock (Part 2)  Late Options Filings Proliferate, Firm Says What are Forms 3, 4, and 5? When are they filed with the SEC?  I am a senior executive. When do I make my Form 4 filing for restricted stock, restricted stock units, and performance shares?  Where are Forms 3, 4, and 5 filed?  Will my company help me prepare and file Forms 3, 4, and 5?  Is the information filed on Forms 3, 4, and 5 confidential?  When I sell stock under a Rule 10b5-1 plan, do I report the sale differently on Form 4?  What is the penalty for a late or omitted filing of Form 3, 4 or 5?  Must I still file Form 4 for my company stock purchases and sales after I leave the company? Do the rules for matching short-swing profits still apply?  Can I violate the insider trading or Section 16 rules after I leave the company by exercising my options and selling the shares?  My company's stock price has substantially dropped. As an executive, I want to buy the stock on the open market to show confidence to investors and analysts. Do I still need to worry about insider trading and liability for short-swing profits under Section 16?  If I enter into a hedging transaction in my company stock, as a senior executive do I need to report this to the SEC on Form 4?  What is "short-swing profits" liability, and how does it affect my stock options and restricted stock?  UPDATED! 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?  I am a senior executive and plan to sell enough restricted stock at vesting to cover the taxes I will owe. Is this sale still subject to the short-swing profit rules under Section 16?  If I sold my stock immediately upon exercise or at vesting, the transaction would violate the insider trading laws and the laws of short-swing profits under Section 16(b) because I had a purchase within six months of the sale. Would this then delay the date of the tax treatment?  If my restricted stock vests during a blackout period, or if the stock sale on the vest date would trigger Section 16 short-swing profit liability, is the tax treatment delayed until a later date?  UPDATED! Do Rule 144 and Section 16 apply to gifts and donations of company stock by senior executives or directors?  Can I donate shares and then immediately buy the same number of shares on the open market?  I am an officer in my company. Should I avoid participating in our ESPP because of Section 16 reporting and issues that stem from liability for short-swing profits?  Are there any special securities law issues and filing requirements with stock appreciation rights (SARs) for senior executives and directors?  Pre-IPO     Pre-IPO: Basics Understanding The Risks In Your Pre-IPO Stock Options (Part 1)  Negotiating And Structuring Your Stock Compensation (Part 2): Private Companies  Stock Grant Sizes In Pre-IPO Tech Companies  Google Options Make Masseuse A Multimillionaire Options Have Lost Their Luster, But Many Still Lust For Them Picture Improves For Private-Company Pay Can some employers not offer stock options or other types of equity compensation to their employees?  UPDATED! Why doesn't my employer offer me stock options or another type of equity compensation?  My employer is an S-corporation. Can I still be granted stock options?  Our company is a partnership. Are stock options available?  NEW! Can limited liability companies make stock grants?  NEW! A private equity firm is buying my company. What will happen to my stock options and restricted stock?  How do pre-IPO and other private companies determine exercise prices?  How do I value options and stock in a private company?  How does my private company decide on the size of my stock grant?  Can consultants or independent contractors be granted stock options or company stock? How common is this practice?  How much will my options be worth in the future?  What is a buyback? Is my employer required to buy back my shares when I leave the company?  UPDATED! How is fair market value (FMV) determined for setting my exercise price? What are common company practices?  Does the IRS have any rules on setting exercise prices?  Can I have the exercise price of a new stock option grant lowered or backdated?  Are there any rules of thumb for how many options consultants should receive on a project?  Is the tax treatment different if I work for a pre-IPO company? For example, are taxes delayed at exercise until the stock is registered with the SEC?  My friends at public companies do cashless exercises of their stock options. Can I do this with stock options at my pre-IPO company?  I am a consultant. If I have stock options in a pre-IPO company, do I have the right to receive financial statements or shareholder reports?  What tax treatment applies if I exercise vested pre-IPO options that now cost more to exercise than they are worth?  Can a private company contractually restrict my ability to resell my shares, or do the securities laws limit my ability to resell them?  If the stock I receive at exercise, at vesting, or outright from the company for services is not registered with the SEC and I cannot immediately sell it, is the date for determining the taxes delayed?  Why is my private-company employer requiring me to make representations about securities-law compliance before I exercise my options?  Why is my private-company employer making me sign a "stockholders' agreement" before I exercise my stock options?  Why is dilution important to me? How do stock grants affect it?  Can I protect myself from dilution and liquidity preferences in my pre-IPO company?  I am getting stock options in an early-stage pre-IPO company. How much dilution can I expect when the company raises more private financing?  I purchased my ISO shares in a pre-IPO company that went bankrupt without going public. Do I owe AMT? I still have not received a stock certificate proving I have shares, nor do I expect I will ever be sent one.  I spent a significant amount of money to exercise options last year in a pre-IPO company that not only never went public but went out of business. I also paid taxes on the spread at exercise. Is there any way I can reclaim the taxes or get a write-off for the money I paid on my worthless stock?      Pre-IPO: Early Exercise Options Early Exercise Options: Clarifying The Confusion And Risks (Part 1)  Early Exercise Options: Clarifying The Confusion And Risks (Part 2)  Early Exercise ISOs Complicated By Final IRS Regulations  Final ISO Regulations Affect Stock Plan Design, Optionholders, And Advisors (Part 1)  IRS And Treasury Warn Against Frivolous Tax Arguments Surrounding Stock Options Now That's An Interesting Option What is a "repurchase right"?  Why do some companies grant stock options that are immediately exercisable before they vest and are subject to a repurchase right by the company?  When should I prefer to immediately exercise an option into stock that is still subject to vesting and/or a company repurchase right? What is the risk?  My company allows me to exercise my ISOs early and receive stock subject to a company repurchase right during the vesting schedule. Does my early exercise before vesting affect the calculations for AMT or disqualifying dispositions?  Can my company file my Section 83(b) election for me?  Is a Section 83(b) election that taxes you on the value of the stock option spread at early exercise (vesting required for resale) ever revocable or rescinded?  Can I exercise my options before they are vested and make a timely Section 83(b) election to be taxed on the spread at that point?  I have early exercise options. If I leave my company before the stock vests, or if the company goes out of business, is it required to repurchase my shares?  My pre-IPO company lets me exercise options still subject to vesting. I did so and received stock subject to a company repurchase right. I am now leaving my job before the shares vested. What are the tax consequences if I forfeit the stock for which I have made an 83(b) election to be taxed at the time of exercise?  I exercised stock options in a pre-IPO company and paid tax on the spread at exercise. The price used for the fair market value (FMV) now seems high, given the expected IPO price. Can I use the IPO price to recover taxes that were paid?      Pre-IPO: Going Public Understanding The Risks In Your Pre-IPO Company Stock Options (Part 2)  Stomach Volatility In Your Company's Stock Without Losing Your Mind  Techniques To Defer Or Reduce Taxes On The Sale Of Your Company's Shares (Part 1): QSB Stock  When Going Public Can Spawn A Merger Windfalls And Pratfalls In Exercising Options My company will go public soon. Can it grant me options now at an exercise price that is substantially lower than the expected IPO price?  After the IPO, are there any restrictions on when I can sell shares of my company stock?  NEW! A private equity firm is buying my company. What will happen to my stock options and restricted stock?  My company is private. Can I set up a Rule 10b5-1 trading plan now so that I may start selling after the IPO lockup period?  How soon after an IPO can I sell my stock under Rule 144?  Do securities laws and regulations place restrictions on stock options or shares granted to consultants and on their freedom to sell the stock?  What is a "lockup"?  Are there ways around a lockup?  If I exercise my vested options during a lockup period, does the date for calculating the spread occur at exercise or at the end of the lockup, when I can sell the stock?  I exercised stock options in a pre-IPO company and paid tax on the spread at exercise. The price used for the fair market value (FMV) now seems high, given the expected IPO price. Can I use the IPO price to recover taxes that were paid?  If I am an "affiliate" of my company, how difficult is it to register my stock for resale to the public?  What are the company-information requirements of Rule 144 that affect my stock sales?  Why do some companies issue "tracking stock"?  How do I have the legend removed from my restricted securities?