Now you can have the key to a vault of tax planning secrets for employee stock options.
(What the IRS doesn’t want you to know about employee stock options.)
Six years ago, two young women were offered jobs at an exciting start-up company. Each of them received incentive stock options. During their fourth year, the company went public. The stock price shot through the roof!
Early in the fifth year, both women exercised their options. Later that year, the company disclosed a sales downturn and the stock tanked!
One of the women made a tax planning transaction that eliminated her tax liability. The other one was stuck with a huge alternative minimum tax. She didn’t have the cash to pay the tax, had to liquidate all of her assets, declared bankruptcy and had to start all over again.
Although stories like this seem incredible, they happen every day. The fact is, employee stock options can be a loaded gun. Employees often “shoot themselves in the foot” with unwise decisions about their options.
How can you find the information you need to avoid a tax disaster?
Read Michael Gray, CPA’s Option Alert newsletter. Each issue includes the latest tax developments for employee stock options, plus questions from our readers with answers. You can visit our archive of past issues here.
The author of these materials is Michael Gray, CPA. Michael Gray is the author of the Secrets of Tax Planning for Employee Stock Options reference manual, and co-author of Employee Stock Options – A Strategic Planning Guide for the 21st Century Optionaire.