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SEC Law

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SEC Law › Rule 144

Articles

How Executives And Directors Can Avoid SEC Troubles Before Trading Their Company Stock (Part 2) This is premium content

Before you sell company stock or exercise options, you must understand the securities laws that apply to you. Part 1 of this series focused on insider trading and Rule 10b5-1 plans. This article looks at other pitfalls of securities law, including Section 16(b) violations involving short-swing profits, and at required SEC filings, such as Form 4 and Form 144.

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 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 restricted securities? Do they differ from restricted stock?

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

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...
Show More FAQs (17 more)

Do the holding period and other requirements under Rule 144 always apply to sales of company stock by both senior executives and regular employees? This is premium content

For resales of restricted securities, the holding period depends on whether the stock is of a reporting or nonreporting company. Restricted securities must be held six months for...

What are the company-information requirements of Rule 144 that affect my stock sales? This is premium content

The SEC Rule 144 requirement that current public information about the company be available is met if the company has filed all the required reports under the Securities Exchange Act of 1934...

How soon after an IPO can I sell my stock under Rule 144? This is premium content

This can depend on whether you are still affiliated with the company. For options and stock issued under Rule 701...

What are the volume limitations imposed on an affiliate under Rule 144? This is premium content

The amount of stock sold by an affiliate, together with all other sales by the affiliate within the preceding three months, cannot exceed the greater of...

How and when is Form 144 filed? Can I amend my form after I have filed it? This is premium content

Once your total sales during any three-month period exceed 5,000 shares or $50,000, you must make this filing even if the sale that puts you over the threshold is much smaller. Three copies...

Do I still file Form 144 even though I have held the restricted securities long enough? This is premium content

You make the filing if you are an affiliate (e.g., a senior executive or a director) or a control person (e.g., you own a big block of stock) or have been one within...

What regulations govern the sales activities of brokers under Rule 144? This is premium content

Rule 144 requires that in most instances affiliates sell their securities in a "broker's transaction." The stockbroker must do no more than...

How does an affiliate sell shares in a private resale? This is premium content

These privately negotiated sales may use what is informally referred to as the "Section 4(1-1/2)" exemption, which is a hybrid provision based on...

After an acquisition is completed, can I immediately sell the shares I receive in the buyer? This is premium content

The legality of exercising stock options, swapping the stock for the buyer's shares, and then immediately...

Do Rule 144, Section 16, and the insider-trading rules apply to gifts and donations of company stock by senior executives or directors? This is premium content

Not surprisingly, anything you do with your company stock as an executive or director raises issues involving the securities laws, potential SEC reporting requirements, and liability risks...

How do I have the legend removed from my restricted securities? This is premium content

You need to show that resale does not require you or your company to...

Are there any special securities law issues and filing requirements with stock appreciation rights (SARs) for senior executives and directors? This is premium content

For senior executives, stock-settled SARs avoid the concerns about cashless exercises by officers and directors raised by...