Pre-IPO: Basics

Private Company Stock Options And RSUs: 10 Facts To Know About The New Tax-Deferral Opportunity This is premium content

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.
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