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.
When should you exercise nonqualified stock options? You need a decision-making process that removes guesswork and emotions. Otherwise, you're likely to exercise too soon or too late.
Your company just gave you a stock option grant, or your existing options are underwater. You wonder: "What are my stock options worth? Are they worth anything at all?" Learn about different valuation methods, including Black-Scholes.
Charles Baril, Luis Betancourt, and John BriggsJournal of Accountancy
Compare the major models used to value options at grant: Black-Scholes-Merton and lattice. If you're good at crunching numbers, you can build your own spreadsheet.
Research shows that employees tend to misunderstand the basic workings of stock options. In many instances, there is a gap between the actual value of an option grant and what the employee thinks the options are worth.
While it is too early to know exactly how stock grant practices may change because of impacts from the Covid-19 pandemic in 2020, there are some lessons from what happened in past big market drops...
Mathematical models for valuing stock options fit into two families: the Black-Scholes model and the "lattice" models. What these try to value in stock options is...
Expensing became mandatory for calendar-year companies several years ago. Because companies take an earnings charge for the "fair value" of stock option grants on their income statements, companies have changed their grant practices by reducing the number of stock options, moving to grant more...
Mandatory expensing started in 2006. Companies must recognize an earnings charge unless their ESPPs fit into the discount safe harbor rule. This has led companies to re-examine features of their ESPPs, including...
Because of the accounting rule, companies have taken various approaches to modifying the features of their ESPPs: reducing the discount, shortening the lookback period, or even...
The future value and its certainty depend on whether you are at a public or a private company. You determine the practical cash value of options in public companies by noting the...
Different methods can be used. The valuation of options and stock issued by private companies is more art than science. At least in the context of valuations for estate and gift tax purposes, the IRS has admitted...
If legal title to stock options is not being transferred under the divorce decree, the options are valued so that other property (e.g., cash or a house) can be awarded to the nonemployee-spouse...
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.
Want to know more? Listen to our podcasts on the basics of stock options, restricted stock, and ESPPs.
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