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1st QUARTER 2014

TAX CENTER

OTHER SECTIONS

GLOBAL TAX GUIDE: Updates in Argentina, Australia, the United Kingdom, and others

GLOSSARY: Adjusted earnings, Hart-Scott-Rodino Act, and more

ASK THE EXPERTS: Selected questions from Premium Members of myStockOptions.com

NONQUALIFIED DEFERRED COMPENSATION: The latest major updates and additions at our sister website myNQDC.com.


TAX CENTER

Editor's Note: Along with the additions and updates below, we comprehensivly updated all of our tax-return content for the 2014 tax season, including our popular annotated diagrams of Form 8949 and Schedule D in the section Reporting Company Stock Sales. The amount of updated tax-return content is too great to list here, but it can all be found in the Tax Center.

What is a "substantial risk of forfeiture" and how does it affect the taxation of restricted stock?

When I file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve stock grant income?

If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?

After I exercise NQSOs, will I need to make estimated tax payments?

When my restricted stock vests, will I need to make estimated tax payments?

If I exercise ISOs and hold the stock (triggering AMT for the spread) or sell the stock in a disqualifying disposition, will I need to make estimated tax payments?

Are there any strategies for paying estimated taxes on income from stock options and restricted stock?

If I exercise stock appreciation rights (SARs), will I need to make estimated tax payments?

Has the likelihood of a tax audit increased?

What is the tax deduction for donations of my company stock?

If I gift stock that has met the holding periods for Section 423 ESPPs, what is the tax treatment?

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OTHER SECTIONS

Basics

Stock Option Terms: What You Can Expect

Why do companies grant stock options, restricted stock, and other equity awards?

Do equity awards really motivate employees?

What is a typical vesting schedule? Do you have any data on vesting schedules and their design?

How common are stock options, restricted stock, performance shares, and ESPPs outside the US? Do surveys show trends?

Are stock plans affected by the Supreme Court's decision on same-sex marriage?

Do companies make stock option or restricted stock grants to directors? Any survey data on director grants?

Does vesting continue while I am on a leave of absence or a sabbatical?

Any data on vesting schedules for restricted stock?

What are the main models for stock option valuation, and how do they differ?

What is a "net options" exercise?

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Restricted Stock, RSUs, & Performance Shares

NEW! Why would a privately held company grant RSUs and not stock options?

Any data on vesting schedules for restricted stock?

What is a "substantial risk of forfeiture" and how does it affect the taxation of restricted stock?

When my restricted stock vests, will I need to make estimated tax payments?

Are there any strategies for paying estimated taxes on income from stock options and restricted stock?

I am eligible for vesting acceleration at retirement but have not actually retired, so why has my restricted stock been taxed? Is the treatment different for RSUs?

If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?

Can my company require me to retain a certain amount of company stock from a stock option exercise or a restricted stock grant?

How do I make a timely and complete Section 83(b) election?

If I make a Section 83(b) election to be taxed on the value of my restricted stock at grant, can I pay the taxes by selling shares or by having my company withhold shares or lend me money?

Is the payout of restricted stock units ever delayed when vesting is accelerated?

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NQSOs

After I exercise NQSOs, will I need to make estimated tax payments?

Are there any strategies for paying estimated taxes on income from stock options and restricted stock?

If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?

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ISOs & AMT

Dr. Strange Tax, Or: How I Learned To Stop Worrying And Love The AMT

Are there guidelines for calculating AMT trigger points? For example, if my spouse and I earn $100,000, will we trigger the AMT when I exercise ISOs?

If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?

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?

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Employee Stock Purchase Plans (ESPPs)

Who is eligible to participate in an ESPP? Can anybody, such as part-time workers or employees outside the US, be excluded from participation?

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Stock Appreciation Rights (SARs)

If I exercise stock appreciation rights (SARs), will I need to make estimated tax payments?

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Financial Planning

NEW! Your Company Stock: The Importance Of Diversification

NEW! I work and live in the United States but have non-immigrant alien status (L1 visa). My stock options vested when I worked in my home country. I plan to exercise the options while living in the US. Will I have to pay taxes to the IRS and/or the US state where I live?

If I move to another country to work, will I still have to pay US taxes on option exercises, restricted stock vesting, and stock sales? Can I avoid double taxation?

How do I diversify my company-stock holdings?

Can my company require me to retain a certain amount of company stock from a stock option exercise or a restricted stock grant?

Can my company set ownership guidelines for company stock? Any survey data about their use?

What are "discounted" stock options, and how are they taxed?

Do companies make stock option or restricted stock grants to directors? Any survey data on director grants?

As a director, can I elect to take part of my retainer as "deferred stock units"?

What is the tax impact of having a clawback in my grant? What if my company claws back the gains?

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Job Events

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?

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Life Events

Funding Your Child's College Education With Stock Options And Other Stock Grants (Parts 1, 2, and 3)

Strategic Planning With Roth IRAs And Stock Compensation (Part 1)

Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation

Retirement Planning With Your Stock Options And Other Stock Compensation (Part 1: Pre-Retirement Planning)

To seek financial aid for my children's college tuition, I need to report my income and assets to the US Department of Education on the Free Application for Federal Student Aid (FAFSA). Should I list my stock grants? At what value?

How do stock grants affect Roth IRA contributions and conversions?

How does a court determine whether my soon-to-be-former spouse should receive any part of my stock grant?

Are stock options that were granted to me after my spouse and I separated but before the divorce is finalized subject to division in the divorce proceedings?

When are stock options and other equity awards deemed to be acquired for purposes of division in a divorce proceeding?

Are stock grants considered in determining child support and alimony payments?

Do I pay any taxes when stock options are transferred to my former spouse as a part of my divorce settlement?

After stock options are transferred to my former spouse in divorce, who pays the taxes at exercise? How does my company withhold and report the taxes?

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SEC Law & Rule 10b5-1 Trading Plans

After the IPO, are there any restrictions on how soon I can sell shares of my company's stock?

How soon after an IPO can I sell my stock under Rule 144?

What are best practices for Rule 10b5-1 trading plans?

Is it possible to violate insider-trading laws by terminating or modifying my Rule 10b5-1 trading plan?

What is an affiliate, and why does affiliate status affect the ability to resell company stock?

What are the rules for resales of restricted securities? What requirements must affiliates (e.g. executives and directors) follow to sell their stock to the public under Rule 144?

If my restricted stock vests during a blackout period, or if the stock sale on the vest date would trigger Section 16 short-swing profit liability, is the tax treatment delayed until a later date?

What is "short-swing profits" liability, and how does it affect my stock options and restricted stock?

If I were to sell my stock immediately upon exercise or at vesting, the transaction would violate the insider-trading laws and the laws of short-swing profits under Section 16(b) because I had a purchase within six months of the sale. Would this then delay the date of the tax treatment?

How do blackout periods affect stock option exercises and the tax treatment?

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M&A

What could happen to my restricted stock in an acquisition of my company?

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?

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Pre-IPO

If I exercise my vested options during a lockup period, does the date for calculating the spread occur at exercise or at the end of the lockup, when I can sell the stock?

How do private companies create liquidity for employees' options and stock, other than going public or getting acquired?

Any survey data on stock grants in privately held companies?

How do I value options and stock in a privately held company?

In a privately held company, can restricted stock and stock option grants be structured so that they vest only when the company goes public or gets acquired? How is this taxed?

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GLOBAL TAX GUIDE This is premium content

UPDATED OR EXPANDED

Argentina
Australia
France
Italy
United Kingdom

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GLOSSARY

NEW!

Adjusted Earnings
Earned Pay
Hart-Scott-Rodino (HSR) Act
Realizable Pay

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ASK THE EXPERTS

NEW!

We exercised NQSOs in October of last year. In our online account, the transaction shows the withheld taxes. However, this withholding is not listed on our Form 1099-B. Is the withheld amount figured into our W-2 and already included in line 62 of Form 1040? I will prepare Form 8949 and Schedule D and just want to make sure I'm not over- or underpaying tax. Am I overlooking anything?

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NONQUALIFIED DEFERRED COMPENSATION

A sample of the latest major additions at our separate website myNQDC.com, a comprehensive publication about nonqualified deferred compensation:

Beware Of Traps In Employment Agreements Under Section 409A

When I file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve nonqualified deferred compensation?

What's new for the 2014 tax-return season?

At year-end, when I’m deciding on salary deferrals into my nonqualified plan for the year ahead, what should be the top issues in my decision-making?

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CONTACT & LICENSING INFORMATION

TO CONTACT THE EDITORS: editors@mystockoptions.com

TO LICENSE OUR CONTENT: sales@mystockoptions.com

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