To have beneficial tax-qualified status, grants of ISOs must have certain characteristics and must follow...
Generally, each state you live in determines what income is taxable and when. For administrative ease, many companies...
Form 1099-B or the equivalent substitute statement is necessary for the accurate completion of your tax return. Five facts you must know about this reporting to avoid tax-return mistakes are...
Major changes have occurred in tax-return reporting in recent years, making accurate tax-return reporting more complex and difficult...
When your W-2 income is added to the price you paid for the stock, this is your cost basis on your tax return. The table below presents the compensation portion of your tax basis for all types of stock grants and ESPPs...
If you sold shares during the calendar year, your brokerage firm will issue IRS Form 1099-B by mid-February of the following year. This is an important document that you must have to complete your tax return for the year of sale...
From our interpretation of the forms and their instructions, myStockOptions.com recommends the following reporting steps to avoid overpaying taxes...
By selling the ISO stock when you exercised it, you eliminated the spread at exercise from the...
With ISOs, it is always the sale that triggers taxes. The rules are similar to those that apply to sales of ISO shares made in the same year as exercise; the difference is that...
To report the sale of shares in a sell-to-cover exercise, you complete Form 8949 along with Schedule D for the year of...
The calculation of the amount of ordinary income and capital gain/loss will vary according to the...
IRS/Treasury regulations on ISOs clarify that the amount of ordinary income in a disqualifying disposition is...
After you have held the stock more than two years from grant and one year from exercise, the spread between the exercise price and the sale price is...
If you have more than one batch of company stock, you are responsible for providing your broker with enough information to identify which shares to sell. If you do not specify...
A "stock swap" or "stock for stock" exercise is a stock option exercise in which the exercise price is paid with shares of company stock you own...
Let's first review the tax rules and the W-2 reporting. The tax basis for...
If you simply lack the funds to pay your income tax, you may want to apply for a payment agreement on the...
Yes, you can use ISO stock to exercise NQSOs without disqualifying it, as the...
At some companies, international assignments are often accompanied by what is commonly called an "equalization package." To give you an incentive to accept the international assignment, the company agrees to...
For estate-tax purposes, unexercised incentive stock options (ISOs) are treated like NQSOs. But ISOs receive more favorable tax treatment at exercise than NQSOs do. Your heirs or estate get...
This type of situation, in which the disqualifying disposition does not appear on the W-2, is more likely to occur when...
While some companies might permit this if asked, the IRS may not allow the practice. The situation is far from clear, as the tax code...
With approval from the board, and perhaps also shareholders, your company can modify outstanding grants in a way that is consistent with its stock plan. However, it should avoid tax pitfalls for you and the company, such as...
A disqualifying disposition occurs if you sell, transfer, exchange, gift, or donate the stock that you acquired without...
Although qualified dividends are taxed at the...
The tax law says that you can offset losses against only the same type of income...
No. All or part of it may be ordinary income. You have capital gains only when you...
The spread at exercise is what matters for the tax calculation...
The put options you buy give you the right to sell the stock at a price you choose. With call options you are selling the right to someone else to "call away" the stock you own. The IRS ruled that the...
The United States taxes the worldwide income of all US citizens, regardless of where they live. This means that when you live abroad you must file a US tax return that includes your worldwide income. In addition, the foreign country where you live may also tax your income. But the US has tax treaties with certain nations to help taxpayers avoid double taxation...
If, as is normally the case, you have no power to refuse or delay your stock sale, no exception...
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...
Section 162(m) of the tax code limits a public company's deduction for each "covered employee" in the year of income recognition to $1 million. In 2018, the Tax Cuts & Jobs Act (TCJA) eliminated...
The IRS can seize your stock options if it applies a federal tax lien to you for unpaid taxes. After seizing your stock options, the IRS can also...
A casualty or theft loss would allow you to deduct the lost amount against your ordinary income, subject to some limits. However, Treasury regulations and court rulings would probably stand in your way. Nevertheless, what you can do is...
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.
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