Employee Stock Options – Use Them or Lose Them

IMAGE: cooldesign / 123rf.com By Aaron Skloff, AIF, CFA, MBA / August 4, 2015 Q: My employer has awarded me numerous stock options over the years.  When can I exercise these employee stock options and what are the tax ramifications? A:  The Problem.  Many employers award stock options to attract and retain employees.  Unfortunately, many employees do not truly understand the different types of options they are awarded, their tax ramifications and how their terms can change. The Solution –...

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Fidelity Seeing Record Growth in Stock Plan Business

BenefitsPro: Fidelity Investments has posted record sales in its stock plan administrative services unit. Since July 1, 2014, the Boston-based investment company has inked 53 new client agreements representing more than 140,000 plan participants. The Fidelity platform provides the recordkeeping and trade execution for restricted stock plans, performance plans, stock options, and employee stock purchase plans. “Company stock plans are playing an increasingly important role in corporate benefit programs, especially as more companies expand their workforce globally and look for ways...

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IRS Stock Compensation Audit Guidelines

The IRS recently released an updated version of its Audit Technique Guide (ATG) for audits involving stock compensation: Equity (Stock) - Based Compensation Audit Techniques Guide, which provides guidance to IRS examiners. Financial advisors and tax professionals with clients that receive equity compensation should consider reviewing it. Here is an outline of the updated ATG on stock compensation. The guide summarizes and confirms the tax treatment for different types of equity compensation and raise issues about how the IRS applies and interprets certain IRC sections and IRS...

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Charitable Donation of Company Stock

By Jenn Namazi, Editorial Director, NASPP My inspiration for this blog actually came from a Fortune magazine article about John Mackey, co-CEO and co-founder of Whole Foods. Only a single sentence in the entire article mentioned stock options. In talking about Mackey’s $1 per year salary, the article also mentioned that “The company donates stock options Mackey would have received to one of its foundations.” As I started thinking about how that transaction would be handled on the company side,...

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