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Financial Planning: Year-End Planning

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NEW! How The Trump Presidency And Tax Reform May Affect Stock Compensation

The myStockOptions Editorial Team
Potential tax changes under the Republican president and the Republican-controlled Congress in 2017 or 2018 may have a meaningful impact on stock compensation and employee ownership.

Year-End Strategies For Restricted Stock, RSUs, And Performance Shares: Seven Ideas To ConsiderThis is premium content

Bruce Brumberg
As part of your year-end and year-beginning tax planning, don't forget to review your holdings in restricted stock, restricted stock units (RSUs), and performance shares. This article presents strategies that many experts suggest.

Top Ideas For Year-End Tax Planning With Stock Compensation (Part 1)

The Editorial Team & Contributors
Podcast included! Understand the concepts of year-end planning for stock options, restricted stock/RSUs, and company stock. Among other issues, you need to weigh current tax rates against expected tax reforms.

Top Ideas For Year-End Tax Planning With Stock Compensation (Part 2)This is premium content

The Editorial Team & Contributors
Podcast included! Understand the core concepts in year-end or year-beginning tax planning for stock options, restricted stock/RSUs, and company stock. Topics in Part 2 include the alternative minimum tax, donations and gifts of stock, and capital gains strategies.

Year-End Strategies For Employee Stock Purchase Plans: Ideas To ConsiderThis is premium content

myStockOptions Editorial Team
When you think about year-end financial and tax planning, don't forget to review shares acquired through an employee stock purchase plan. This article outlines issues and strategies to contemplate.

Leading Advisors Reveal Strategies For Equity Comp And Company Stock At Year-End Contributors & Editorial Team
We asked several financial advisors to provide their ideas on planning for year-end 2016 and beyond. Read their responses in their own words.

Stockbrokers' Secrets: Year-End Planning For NQSOs, Restricted Stock, And RSUsThis is premium content

John P. Barringer and Michael Beriss
Learn about year-end ideas that apply to NQSOs and restricted stock/RSUs, and consider the impact of recent tax-rate changes.

Stockbrokers' Secrets: Year-End Planning For ISOsThis is premium content

John P. Barringer and Michael Beriss
Learn about year-end planning for incentive stock options. This article includes ideas related to the alternative minimum tax.

NEW! Making Gifts And Donations Of Company StockThis is premium content

The myStockOptions Editorial Team
In addition to being an effective form of generosity, gifting and/or donating shares can play a role in financial and tax planning for your equity compensation and company stock. This article presents the basics that you need to know when you are contemplating gifts or charitable donations of shares acquired from stock options, restricted stock/RSUs, or employee stock purchase plans.

Restricted Stock & Stock Options: Financial Planning After Your Tax Return Is Filed (Part 1)This is premium content

Tom Davison and Liam Hurley
The time right after you have completed your tax return is ideal for big-picture financial planning. You can more accurately project your income and likely tax situation for this year and the next to develop your strategy. This article series discusses factors to consider in your income and tax projection, along with planning ideas.

The ISO Tax Trap And The AMT Credit Myth: What To Do Before Exercise And At Year-EndThis is premium content

Alan Ungar
The tax reductions of the past few years have brought both good and bad news for holders of incentive stock options. While you may have lower capital gains rates when you hold the shares long enough after exercise, it is harder to avoid the risks of the alternative minimum tax (AMT) and to fully recover any AMT credit.

Presentation! Year-End Tax And Financial Planning: What Employees And Their Advisors Should Know

Bruce Brumberg, Editor-in-Chief
Updated annually, this PowerPoint presentation provides a timely overview of year-end financial-planning topics for stock compensation, including points of importance for employee education and for financial advisors.

Keep Your Eyes On The Calendar

Robert Gordon
Investment News
Before the end of the year, review any ISO stock you are holding from earlier exercises and consider strategies for the following year. This article offers tips that apply every year. (Registration is required.)

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What are some year-end strategies for restricted stock, RSUs, and stock options?This is premium content

Decisions in year-end financial and tax planning depend on several factors. In this FAQ, we present several situations and some strategies that many experts suggest. Of course, you should...

For NQSOs or SARs exercised on the last business day of 2016, or for restricted stock that vests on that day, is the income taxable in 2016 or 2017?

The income will be included in tax year 2016, even if you recognize it on the last business day of the year. However, you should confirm...

My income next year will trigger higher taxes, including the 3.8% Medicare surtax on capital gains. If I sell stock this year, I can avoid these taxes and then next year repurchase the stock to reset the basis. What issues should I consider?This is premium content

By selling stock at a gain and then buying it back at the current price, you create a new...

Next year I may be in a higher tax bracket. I am thinking about exercising my nonqualified stock options before then to accelerate income into this year. What issues do I need to think about?This is premium content

Before you rush into exercising, you may want to do some calculations with potential future stock prices and tax rates. When you exercise earlier than necessary...

At year-end, is there any general way to determine how many ISOs I can exercise and hold before triggering the AMT?This is premium content

One strategy for minimizing AMT is to spread out the exercise of ISOs over...

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)?This is premium content

Don't get tripped up by misunderstanding the tax rules. A common mistake is thinking that because you are selling a stock a capital gain lurks somewhere in the tax calculation...

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?This is premium content

The vesting and the sale are separate transactions and generate different types of income. Unless you made an 83(b) election to be taxed at grant, you were first taxed on the stock's value at vesting, which created ordinary income to you. With restricted stock units (RSUs), taxation occurs...

How do stock grants affect Roth IRA contributions and conversions?This is premium content

The grant itself has no impact. The compensation income generated from exercise or vesting can affect...

Are there any stock option or restricted stock strategies for using capital-loss carry-forwards?This is premium content

Tax considerations alone should not drive the choice of what stock you sell. For example, if you are holding appreciated company stock from a nonqualified stock option (NQSO) exercise or restricted stock vesting, you will be taxed on...

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)?This is premium content

The value at vesting is all ordinary income. You have capital gain only for the increase in the stock price after vesting. Only this gain at sale can be...

Are there any strategies for paying estimated taxes on income from stock options and restricted stock?This is premium content

Estimated-tax periods end on the last days of March, May, August, and December, with payments due by the 15th (or the next business day) of the following month. If you are paying estimated taxes, one strategy is that just after the start of an estimated-tax period you can...

What ISO strategies can help minimize AMT liability?This is premium content

Experts suggest several strategies for you to consider when you exercise ISOs and are concerned about triggering the alternative minimum tax. For example, near year-end or at the beginning of the year, you can...

I know that my ISO exercises will trigger the AMT for me this year or next. Are there planning strategies related to other tax payments and income?This is premium content

When you are intermittently subject to the AMT, tax advisors suggest different planning ideas on shifting income and deductions. You have much less flexibility in your planning when you project paying AMT for the next several tax years. A basic plan is to...

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?This is premium content

Assume that the ISO exercise/hold or other parts of the AMT calculation will trigger AMT. A rule of thumb is...

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?This is premium content

As long as you sell the shares on or before December 31, you will...

Can I rescind a stock option exercise and reverse the tax impact?This is premium content

Only in very limited circumstances, and your company needs to allow the rescission. The company would...

Is a Section 83(b) election taxing you on the value of restricted stock at grant ever revocable? Can it be rescinded?This is premium content

The IRS has provided guidance on the limited circumstances in which this is permitted. The Section 83(b) election is irrevocable unless you...

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