Going Public
John P. Barringer
My clients who work at startup companies preparing for an initial public offering (IPO) are giddy with thoughts of the wealth and opportunities their pre-IPO stock compensation will provide. I try to set them straight with five financial-planning points that may help to manage their post-IPO expectations.
Basics
Bruce Brumberg
Shares in privately held companies lack liquidity and thus cannot be sold, creating difficulty when taxes are owed on income recognized from stock option exercise and RSU vesting. To address this problem, the Tax Cuts & Jobs Act introduced an income-deferral opportunity for certain types of stock compensation at private companies. These "qualified equity grants" are now provided by the Section 83(i) of the tax code.
Going Public
Ryan Harvey and Bryan Smith
Podcast included! As privately held companies prepare for their market debuts, they make changes in their equity compensation programs beyond just stock options. This article looks at some of the shifts you can expect in your stock grants from the startup stage through the IPO and the post-IPO periods.
Show More Selected Articles
Going Public
Bruce Brumberg
The biggest surprise for employees with stock options at pre-IPO companies is often the amount of taxes they need to pay when their company goes public or is acquired. When they exercise their options after the IPO or as part of the acquisition, selling the stock at the same time, a large chunk of their proceeds goes to pay federal and state taxes. This article looks at ways to reduce this tax burden.
Early-Exercise Options
Terence Kelly and Jamison Klang
Companies grant early-exercise stock options mainly to limit the taxes you will pay at exercise or later at the sale of the stock. However, these options can have negative tax consequences in a disqualifying disposition (e.g. an early sale). This article reviews the tax effects of early-exercise incentive stock options and compares the tax results to those of early-exercise nonqualified stock options.
Basics
Edwin L. Miller, Jr.
Employees in startup companies often have misconceptions about their stock options and restricted stock. Understand what could happen to your stock options or restricted stock in venture capital financings, in an acquisition, or in an IPO. Part 1 looks at M&A deals; Part 2 analyzes IPOs.
This is simply a selection of the many articles in this section.
Use the navigation to the left to explore all of the categories in this section.
Tax 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.
Basics
Test your knowledge with our