Planning for incentive stock options always involves a level of uncertainty. A typical strategy involves holding at least some of the shares for a year or more after exercising the option, while sweating out the possibility that a decline in the stock price will wipe out the tax benefit and then some. This year option holders face an unusual level of uncertainty in the tax law as well. We’re dealing with at least five significant variables.
Free Online Guides
Other
Resources
About
Fairmark.com
Posts Tagged ‘feature’
Uncertainty in ISO Strategies
April 26, 2012
By Kaye A. Thomas
April 26, 2012
By Kaye A. Thomas
Q&A on Domestic Partner Tax Filing
February 6, 2011
This is the first tax season in which many gay and lesbian couples will file federal income tax returns reflecting community property rules. The change affects tax returns for 2010, and also provides an opportunity (but not an obligation) to amend prior year tax returns if the result is a refund. Here are some questions and answers regarding the new filing requirement. (more…)
February 6, 2011
This is the first tax season in which many gay and lesbian couples will file federal income tax returns reflecting community property rules. The change affects tax returns for 2010, and also provides an opportunity (but not an obligation) to amend prior year tax returns if the result is a refund. Here are some questions and answers regarding the new filing requirement. (more…)
Planning for Higher Capital Gains Rates
September 9, 2010
For people in the higher tax brackets, capital gains rates are likely to be higher in the near future. Many investors may wonder whether they should cash gains before the end of the year. Our analysis reveals that this strategy won’t always produce benefits. Paradoxically, some people end up with better results when paying more tax. (more…)
September 9, 2010
For people in the higher tax brackets, capital gains rates are likely to be higher in the near future. Many investors may wonder whether they should cash gains before the end of the year. Our analysis reveals that this strategy won’t always produce benefits. Paradoxically, some people end up with better results when paying more tax. (more…)
Congress to Debate 1099 Reporting
August 10, 2010
Under current law, a business paying more than $600 for services provided by an individual other than an employee must report that payment to the IRS on Form 1099. One of the revenue provisions in the Patient Protection Act expands the Form 1099 reporting requirements to include payments to corporations (other than exempt organizations), and payments for property and other “gross proceeds.” The provision, which applies to payments after 2011, is aimed at preventing tax avoidance by individuals and companies receiving those payments. It has the virtue of raising government revenue without imposing a tax increase, yet it’s controversial because of the paperwork burden it imposes on companies making the payments. Senate debate of the small business tax bill early next month will include consideration of amendments to repeal or amend this requirement before it goes into effect. (more…)
August 10, 2010
Under current law, a business paying more than $600 for services provided by an individual other than an employee must report that payment to the IRS on Form 1099. One of the revenue provisions in the Patient Protection Act expands the Form 1099 reporting requirements to include payments to corporations (other than exempt organizations), and payments for property and other “gross proceeds.” The provision, which applies to payments after 2011, is aimed at preventing tax avoidance by individuals and companies receiving those payments. It has the virtue of raising government revenue without imposing a tax increase, yet it’s controversial because of the paperwork burden it imposes on companies making the payments. Senate debate of the small business tax bill early next month will include consideration of amendments to repeal or amend this requirement before it goes into effect. (more…)
Basis Rules for 2010 Decedents
August 5, 2010
No doubt you’re aware that the estate tax has been repealed, solely for people dying in 2010. It’s less well known that repeal of the estate tax was accompanied by a change in the rules for adjusting the basis of inherited assets. For a description of the rules that apply when you inherit from someone who dies this year, see our new page on basis of property inherited from 2010 decedents.
August 5, 2010
No doubt you’re aware that the estate tax has been repealed, solely for people dying in 2010. It’s less well known that repeal of the estate tax was accompanied by a change in the rules for adjusting the basis of inherited assets. For a description of the rules that apply when you inherit from someone who dies this year, see our new page on basis of property inherited from 2010 decedents.
Last Gasp for Short GRATs?
July 6, 2010
It appears that the grantor retained annuity trust, or GRAT, is about to lose much of its flexibility. Legislation to curtail the popular estate planning tool has been on the table for some time. Just days after the Senate removed GRAT provisions from the pending small business legislation, the House plugged it into a supplemental appropriations bill that provides funding for the troop surge in Afghanistan, among other measures. Assuming the bill is passed by the Senate, the measure would apply to transfers occurring after the date President Obama signs it into law. (more…)
July 6, 2010
It appears that the grantor retained annuity trust, or GRAT, is about to lose much of its flexibility. Legislation to curtail the popular estate planning tool has been on the table for some time. Just days after the Senate removed GRAT provisions from the pending small business legislation, the House plugged it into a supplemental appropriations bill that provides funding for the troop surge in Afghanistan, among other measures. Assuming the bill is passed by the Senate, the measure would apply to transfers occurring after the date President Obama signs it into law. (more…)
Q2: Stocks Down, Thankfully
July 1, 2010
The second quarter has come to a close with the stock market roughly 10% below the highest levels reached in April. With apologies to retirees living off their investments, the rest of us can celebrate. We’re going to benefit from the decline. At least, we will if we keep our heads. (more…)
July 1, 2010
The second quarter has come to a close with the stock market roughly 10% below the highest levels reached in April. With apologies to retirees living off their investments, the rest of us can celebrate. We’re going to benefit from the decline. At least, we will if we keep our heads. (more…)
Senate Would Expand Roth Accounts
June 30, 2010
Action in the Senate June 29 may result in expanded access to Roth accounts. One provision would take effect upon enactment, which is on a fast track. Before it can become law, the provision must be approved by the House of Representatives. (more…)
June 30, 2010
Action in the Senate June 29 may result in expanded access to Roth accounts. One provision would take effect upon enactment, which is on a fast track. Before it can become law, the provision must be approved by the House of Representatives. (more…)
Roth Conversions and the Medicare Tax
June 24, 2010
This is the fifth in our series on Roth conversions and tax rates. (For earlier ones, click on the “Roth conversion” tag below this entry.) Our focus here is on how the new Medicare tax on investment income may affect planning for a Roth conversion in 2010 — even though the new tax doesn’t take effect until 2013. (more…)
June 24, 2010
This is the fifth in our series on Roth conversions and tax rates. (For earlier ones, click on the “Roth conversion” tag below this entry.) Our focus here is on how the new Medicare tax on investment income may affect planning for a Roth conversion in 2010 — even though the new tax doesn’t take effect until 2013. (more…)
Fairmark.com is your source for news, features, free online guides and other resources dealing with taxes and investing. To stay current, sign up for our free newsletter.
Our books
| That Thing Rich People Do |
|
The fastest, easiest way to learn the principles of investing. |
| Go Roth! | |
|
Our complete guide to Roth IRAs and Roth accounts in 401k and 403b plans: choosing, creating, building and using these accounts. |
| Consider Your Options | |
|
A plain-language guide for people who receive stock options or other forms of equity compensation. |
| Equity Compensation Strategies | |
 |
A text for financial advisors and other professionals who offer advice on how to handle equity compensation including stock options. |
| Capital Gains, Minimal Taxes | |
 |
Tax rules and strategies for people who buy, own and sell stocks, mutual funds and stock options. |
A publication of Fairmark Press Inc.
Copyright Kaye A. Thomas 1997 - 2012