Wishful thinking! Just as you are not taxed on the value of the options at grant, you may not write off any expired unexercised options, whether underwater or in the money...
An options exchange is an alternative to repricing underwater stock options. Most companies set an exchange ratio of underwater options for new ones at the current market price so that the total value of the new options is equal to that of the previous options. Alternatively...
The number of companies, and their employees, with underwater stock options has substantially increased, especially since the historic drop of the stock markets in October 2008. Various surveys and corporate examples show that...
Deciding whether or not to accept an options exchange involves many variables, including the potential for...
With approval from the board, and perhaps also shareholders, your company can modify outstanding grants in a way that is consistent with its stock plan. However, it should avoid tax pitfalls for you and the company, such as...
While stock option exchanges usually do not create tax consequences for participants who are US tax residents, employees who are tax residents of other countries may be taxed when...
Very few companies arrange a straight repricing of outstanding options. Companies concerned about widespread and deeply underwater options may offer...
The standard option-for-option exchange is not taxable. When you exchange underwater options for restricted stock, the value of the shares...
This is wishful thinking, because these are two separate transactions. It does not make sense to...
Employee stock purchase plans cannot be "underwater" in the traditional sense of having a purchase price greater than the current stock price. With an ESPP, the market price at the beginning of an offering does not...
Not in the way stock options can. Restricted stock is worth the full market value of the stock when it vests (or, with restricted stock units, when shares are delivered). It does not matter if...
Generally, the exercise price cannot be raised without your written consent...
You recognize ordinary income for the full value of the cash payment. Any deferred portion of the cash sale proceeds is not taxable until...
This depends on the provisions in your stock plan and the structure of the merger or acquisition. According to the flexibility for adjusting outstanding grants that your company's stock plan provides, the buyer can...
This depends on whether the ISOs are already vested. According to the final IRS regulations on ISOs...
In a public company you would never exercise underwater stock options. In a private company...
When the net intrinsic value of the stock is zero, the attorney for the nonemployee-spouse has two ways to obtain...
When options are exercised, generally the estate or beneficiary is able to take an income tax deduction for the amount of estate taxes already paid by the estate. But when they are not exercised you cannot take the deduction against other income...
Microsoft was one of the first companies to have an underwater options exchange for cash, and did so long before the market downturn in 2008. According to a statement the company issued on...