Archive for the ‘Nonqualified stock options’ Category

Nonqualified Options? Don’t Ask the IRS

January 12, 2015

Compensation in stock and optionsWe recently added some material on how to report sales of stock you acquire by exercising a nonqualified option. In the course of doing that we took a look at what the IRS has to say on the subject. Not much, it turns out — and some of what they say isn’t accurate.

details: The Sorry State of IRS Guidance on Nonqualified Options

Options Backdating Dispute Ruling

March 4, 2013

A tax dispute arising from alleged backdating of stock options granted to prominent entrepreneur Sehat Sutardja continues to play out with a ruling in favor of the government. In a suit seeking a refund of taxes paid under section 409A of the Internal Revenue Code, dealing with nonqualified deferred compensation, the court granted partial summary judgment on a number of issues, including a finding that although regulations establishing that underpriced options would be treated as creating a “deferral of compensation” for this purpose did not take effect until 2008, application of this rule to stock options in earlier years was proper pursuant to IRS Notice 2005-1.


Cashing in Options at Lower Tax Rates

September 15, 2010

A recent post on Janet Novack’s Taxing Matters blog talks about executives rushing to cash in stock options before tax rates go up. Novack cites academic research indicating executives are likely to take this approach, and anecdotal evidence that it is already happening. Chances are that many of these executives will regret that choice. (more…)

Sign up for our FREE NEWSLETTER