Tax Center Global Tax Guide / Glossary / Discussion / Newsletters / About Us
Register Log In
myRecordsmyToolsmyClients
SEC Law

Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.


SEC Law › Basics

Articles

The Equity Compensation Planning Dilemma For Corporate Executives This is premium content

Podcast included! Executives must carefully balance the demands of many constituencies interested in their company's stock. Explores ways to manage these pressures while achieving financial goals.

Ten Compliance Concerns That Executives Must Understand To Prevent SEC, IRS, And Corporate Problems (Part 1): Company Stock Trades This is premium content

Podcast included! An often underestimated danger companies face is the risk that an executive or employee may violate corporate, tax, or securities laws. This article series outlines practices for executives to help them avoid compliance problems, and explains the possible penalties of noncompliance. Part 1 focuses on compliance issues involving company stock holdings and transactions.

FAQs

What is restricted stock? Does it differ from restricted securities?

Don't confuse restricted securities and restricted stock. They are very different...

Are sales of shares by executives and directors of a public company subject to any securities-law restrictions?

Yes. Stock held by an "affiliate" (e.g. any director or executive officer) of a public company generally must be ...
Show More FAQs (17 more)

My company's stock is now essentially worthless because of securities fraud by senior executives. Can I claim a casualty or theft loss on my tax return? This is premium content

A casualty or theft loss would allow you to deduct the lost amount against your ordinary income, subject to some limits. However, Treasury regulations and court rulings would probably stand in your way. Nevertheless, what you can do is...

What is the SEC?

The SEC is, in full, the Securities and Exchange Commission. The SEC is the federal agency...

UPDATES! Can the SEC, the Treasury, or my company take away stock option gains, restricted stock, and performance shares after accounting fraud has occurred? This is premium content

In enforcement actions, the SEC has gone after option or stock profits gained by senior executives at prices that were inflated by financial fraud. Recent legislation, such as the Dodd-Frank Act, makes this type of enforcement action even more likely...

Are public resources available for doing research on a company's stock compensation practices, the grants it is making, and the holdings of its executives? This is premium content

One resource is the SEC's website. There you can search on the SEC's EDGAR system for the filings discussed below. Another resource is the...

What are Forms 3, 4, and 5? When are these insider reports filed with the SEC?

Under Section 16 of the securities laws, senior executives, directors, and large-block shareholders are required to make ongoing filings about their company stock holdings to report any changes. These filings are made on...

What is an affiliate, and why does affiliate status affect the ability to resell company stock?

"Affiliate" is a term used in the securities laws to refer to a person in a relationship of control with a company. "Control" denotes the power to direct the management or policies of the company in some way, and this is generally means...

What are the rules for resales of restricted securities? What requirements must affiliates (e.g. executives and directors) follow to sell their stock to the public under Rule 144? This is premium content

This is the most common way to resell restricted securities not registered with the SEC, and the most common way for senior managers and directors to sell their stock. There are five core requirements of a Rule 144 sale, which include...

What are "blackout periods" and "window periods"? This is premium content

Blackout periods are times when some or all of a company's employees are prohibited from trading its securities (sometimes including the exercise of stock options). Window periods are times when trading by those employees is allowed. A company imposes a blackout when it...

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? This is premium content

The popular media sometimes confuse the term "blackout" with "lockdown." For stock plans, these terms apply to different...

Are senior executives and directors banned from trading company stock during a 401(k) blackout period? This is premium content

During any 401(k) blackout period, directors and executive officers...

If I gift my company stock to a grantor-retained annuity trust (GRAT), do the securities laws still apply? This is premium content

When you are the trustee of a grantor-retained annuity trust (GRAT), and the beneficiary during the annuity payment period, the securities law prohibition on insider trading...

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?

At a minimum, do not expect any new stock option grants with an exercise price lower than the market price on the grant date. The tax treatment varies by type of grant. Some of the companies involved in the controversial backdating of stock options restricted employees from...

If I am an "affiliate" of my company, how difficult is it to register my stock for resale to the public? This is premium content

Except at times when a number of affiliates will simultaneously sell a portion of their stock, a public company is unlikely to register an affiliate's stock for resale...

Do federal securities laws impose any reporting requirements on a public company's officers, directors, and significant stockholders? This is premium content

Yes. Section 16(a) of the Securities Exchange Act of 1934 provides that every person who is a director or executive officer (or a 10% beneficial owner) of a public company must file periodic reports of stock ownership with the SEC...

Are there special public-company notice requirements for senior executives or directors before they exercise and sell? This is premium content

Yes. If you are an officer or director of a public company, your company probably has a pre-clearance policy...