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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.


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My Company Is Being Acquired: What Happens To My Stock Options? (Part 3) This is premium content

Part 1 looked at the importance of your option grant terms. Part 2 examined the acquisition's terms and the valuation of your company. Now let's look at the tax treatment.

FAQs

What is the tax treatment of my restricted stock in an acquisition? This is premium content

This depends on how grants of restricted stock or RSUs are treated under the terms of the acquisition or merger. For example, if the vesting is accelerated, then you will be...

What is the tax treatment of my stock options in an acquisition? This is premium content

This depends on how stock options are treated under the terms of the deal. For example, if you are receiving for your options...

What is the tax treatment of my ESPP stock in an acquisition? This is premium content

This depends on how your company's stock is treated under the terms of the acquisition or merger...
Show More FAQs (7 more)

Does the accelerated vesting of my stock options, restricted stock, and/or performance shares in a change of control or termination have any tax impact on me, such as for ISOs and golden parachute payments? This is premium content

With stock grants of normal size, you face no tax impact beyond the standard tax treatment. ISOs may be converted to NQSOs should any acceleration of vesting cause...

I have an earnout or installment payment of additional shares because my company met performance goals. How are these additional shares taxed? This is premium content

This structure is more common in acquisitions of private companies or small public companies than in acquisitions of big public companies. Since the grant of the additional shares is tied to performance, the value is taxed as...

Can the annual limit of $100,000 in exercisable ISOs be adversely affected by any post-grant events, such as job termination or the acceleration of vesting in a merger? This is premium content

One barrier to maintaining ISO status is any acceleration of your vesting that causes more than $100,000 of the grant's value to be first exercisable in...