Michael Gray, CPA’s Option Alert #93

An irregular alert for issues relating to employee stock options

July 11, 2011
© 2011 by Michael Gray, CPA
ISSN 1931-2768

(If you find this information valuable, please pass it on to a colleague!)

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The year is half over. How is it going?

Time marches on! It’s hard to believe the year is already half over. How is your year going? Are you reaching the goals that you set last January? Do you have developments, such as your company’s IPO or acquisition for which you need tax advice? Why not set an appointment now for a mid-year planning meeting or telephone conference? Call Dawn Siemer at 408-918-3162 from 9 a.m. to 5 p.m. Pacific Time to make an appointment.

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Do you need help with finishing extended income tax returns, preparing amended income tax returns, or tax audits?

During the summer, we are focusing on finishing extended income tax returns. Some of our readers have found errors in or are uncomfortable with tax returns that they prepared using tax software or were prepared by other tax return preparation companies. We can provide a second opinion. Others have received notices for tax audits and sometimes can’t get the help they need from their tax return preparer. We can help with all of these. To make an appointment, call Dawn Siemer Mondays, Wednesdays or Fridays at 408-918-3162 from 9 a.m. to 5:30 p.m.

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Need help for upcoming IPO, acquisition, or leaving employer?

The stock market has returned to life. We are seeing a number of employees who want planning help for their employee stock options relating to a coming initial public offering, acquisition of their employer or leaving their employer. May we be of service to you for planning for these events? To make an appointment, call Dawn Siemer Mondays, Wednesdays or Fridays at 408-918-3162 from 9 a.m. to 5 p.m.

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Is 2011 your last chance to position yourself for the 15% federal tax rate for long-term capital gains?

I wrote blog post on this subject.

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IRS allows Section 83(b) election to be revoked

Once you make a Section 83(b) election, it can only be revoked with the consent of the IRS. (When you make a Section 83(b) election, you are electing to disregard restrictions relating to property received as compensation, resulting in its being taxable when received. For example, a restricted stock subject to a vesting schedule would be treated as folly vested for tax reporting.)

The IRS recently permitted a taxpayer to revoke a Section 83(b) election. The ruling was not surprising, because the taxpayer filed his or her request to revoke the election within the 30 day time period allowed under Section 83(b) to make the election.

In almost all other situations, the IRS has refused to permit the election to be revoked.

(Letter Ruling 201109013, November 8, 2010.)

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Deadline extended for Foreign Bank Account Reports when signature authority only

The IRS has extended the due date for Form 90-22.1, the Report of Foreign Bank and Financial Accounts for calendar years before 2010 to November 1, 2011 when the report is only because the individual has signature authority over the account but otherwise has no financial interest in the account. (Notice 2011-54.) The deadline was not extended for the 2010 form.

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100th episode of Financial Insider Weekly is broadcast

Last Wednesday, June 29, the 100th episode of Financial Insider Weekly was broadcast on CreaTV in San Jose and Campbell. Our guest was attorney and retired CPA David Howard of Hoge, Fenton, Jones & Appel, explaining the information reporting requirements for foreign bank and brokerage accounts and foreign trusts. Hooray!

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Financial Insider Weekly broadcast schedule for July and August.

Financial Insider Weekly is broadcast in San Jose and Campbell on Wednesdays at 7:00 p.m., Pacific Time. After August 15, 2011, the date and time will change to Fridays at 8:00 p.m. Pacific Time. You can watch it on Comcast channel 15 for San Jose and Campbell. The show is broadcast as streaming video at the same time at www.creatvsj.org.

Here are the scheduled interviews for the rest of July and August:

July 13, Jeffrey B. Hare, Attorney, APC, “Using a checkbook LLC to invest IRA and Roth funds”
July 20, James V. Quillinan, Attorney, Hopkins & Carley, “Tax planning for real estate change of ownership in California”
July 27, James V. Quillinan, Attorney, Hopkins & Carley, “Estate planning with temporary changes for 2011 and 2012”
August 3, Michael Desmarais, Attorney, “Estate Planning For Second Marriages”
August 10, John Hopkins, Attorney, Hopkins & Carley, “Succession planning for a family business”
August 19 (new day & time!), Peggy Martin, ChFC, MSFS, CLU, The Family Wealth Consulting Group, “Sucially Responsible and Sustainable Investing”
August 26, Craig Martin, CFP®, The Family Wealth Consulting Group, “Alternative investments besides securities as part of a balanced portfolio”

Financial Insider Weekly is also broadcast as follows:

  • Sunday at 5 p.m. on Comcast channel 28 in Hayward, Alameda and Fremont and on AT&T U-Verse Channel 99, Hayward public access TV 28 in California
  • Monday at 7:30 p.m. on Comcast channel 15 in Saratoga
  • Tuesday at 9:00 p.m. on Comcast channel 26 and AT&T U-verse channel 99 in Marin County
  • Thursday at 5:30 p.m. on Comcast channel 27 in Santa Cruz County and Charter Communications channel 73 in Capitola and Watsonville
  • Thursday at 10 p.m. on Comcast channel 28 in Hayward, Alameda and Fremont and on AT&T U-Verse Channel 99, Hayward public access TV 28 in California
  • Friday at 4 p.m. on cable channel 15 in Cupertino, Los Altos and Mountain View
  • Friday at 4:30 p.m. on Comcast channel 15 in Los Gatos
  • Friday at 6:00 p.m. on Comcast and Astound channel 29 in San Francisco. Online streaming video at www.bavc.org, “public access TV”.

Past episodes of Financial Insider Weekly are posted on YouTube. One way to watch them is to go to our web site, www.financialinsiderweekly.com, and click on “Past Episodes.”

Let me know any ideas that you have for topics or guests. Guests will usually have to be located in or near the Silicon Valley in California.

Hope you can watch or record the show. Please tell your friends about it!

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Michael Gray regrets he can no longer answer emails personally. He will answer selected questions in this newsletter. Email your questions to mgray@stockoptionadvisors.com.

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Follow me on Twitter, Facebook or LinkedIn!

If you enjoy Twitter, please follow me at twitter.com/michaelgraycpa. I would especially appreciate retweets of our messages announcing episodes of Financial Insider Weekly.

I’m also on Facebook and Linked In. You can also follow me on other social media sites, www.facebook.com and www.linkedin.com/in/michaelgraycpa.

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Check out my blog.

I have also started a blog at michaelgraycpa.com. Check it out!

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Do you know about our other newsletters?

For general tax developments, tax planning ideas, business development ideas and book reviews, subscribe to Michael Gray, CPA’s Tax & Business Insight.

We are now offering our real estate tax newsletter, Michael Gray, CPA’s Real Estate Tax Letter, free of charge. Like this newsletter, we will talk about new developments, have reports on special tax concerns, and answer questions and answers. To subscribe and read a sample issue, visit realestatetaxletter.com.

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IRS Circular 230 Disclosure:

As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this communication 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.

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Consult with a tax advisor

For our readers who aren’t tax advisors, this newsletter is intended to alert you about tax issues that could affect you. It is not a substitute for advice from a professional tax advisor. You will find that getting advice from a qualified advisor is a worthwhile investment.

Tax advisors should view the newsletter as an alert to become aware of issues relating to employee stock options for further research and study.

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Subscribe to Michael Gray, CPA’s Option Alert!

To receive the next issue of Michael Gray, CPA’s Option Alert with more employee stock option tax developments and answers to questions from our readers automatically via email, subscribe by filling out the form below.

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(Michael Gray is the author of Secrets of Tax Planning For Employee Stock Options, Stock Grants and ESOPs.)

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