Home
Introducing Our Firm
Stock Options
     Articles
     Option Alert
     ISO FAQ
     NQSO FAQ
     ESO FAQ
     Other Websites
Need Help?

Call 408-918-3162
Email Us

Find us on Facebook
Follow me on Twitter
Link to Michael Gray, CPA's main page.
Keep up-to-date
on employee stock options!

ESO Holder subscribe
Tax Advisor unsubscribe
Investment Co.  

Print This Page


Do we have to pay cash to exercise non-qualified options?

November 29, 2004

Subject:   Need Help
Date:   Tue, 16 Nov 2004
From:   Matt

My wife has some non-qualified stock options from her publicly- traded employer company. Do we have to pay the cash for the option price to exercise the options?

Thanks for your help,
Matt

Answer

Date:   Wed, 24 Nov 2004

Hello Matt,

Your wife should talk to the people in her company who are responsible for administering the stock option plan. Usually companies have arrangements with securities brokerage firms for employees to simultaneously exercise and sell their shares. Then you don't have to pay the cash purchase price yourself; it's deducted from the sale proceeds. Alternatively, you can make a "cashless exercise" to sell just enough shares to pay the exercise price plus any employment taxes. Personally, I think it's usually better to sell all non-qualified option shares received.

Good luck!

Mike Gray

For more information about non-qualified stock options, request our free report, Non-Qualified Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

 

Home | Introducing Our Firm | Stock Option Resources | Michael Gray, CPA Option Alert | Privacy Policy | Need Help?


Michael Gray, CPA
2190 Stokes St. Ste. 102
San Jose, CA 95128
(408) 918-3162
FAX: (408) 998-2766
Join Michael Gray, CPA's Option Alert!
ESO Holder subscribe
Tax Advisor unsubscribe
Investment Co.  

We respect your email privacy!