Stock Appreciation Rights Quiz

Stock Appreciation Rights Quiz

What do you know about stock appreciation rights?

Please answer the following 10 questions. This quiz is also a course of study. The answer key links to content on the topic for follow-up reading.

1. What does SAR stand for?

2. What's the appreciation?

3. When you exercise stock-settled SARs, your gain (before taxes) is an amount of shares equal to:

4. How do you exercise a stock appreciation right?

5. The taxation of stock appreciation rights is most similar to what other type of stock grant?

6. Which event triggers tax withholding and taxable income?

7. What federal taxes are withheld at exercise?

8. How long must you hold SAR stock after exercise to have the sale proceeds taxed favorably as long-term capital gain?

9. On your tax return, how do you report capital gain from a sale of SAR stock?

10. Why do companies like stock appreciation rights?

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