Michael Gray, CPA’s Option Alert #137
An irregular alert for issues relating to employee stock options
September 22, 2015
© 2015 by Michael Gray, CPA
(If you find this information valuable, please pass it on to a colleague!)
Table of Contents
- Dawn Siemer’s working hours have changed
- Extended individual income tax returns due October 15
- IRS issues audit guide for equity compensation
- California conformity bills await the governor’s approval
- Does your group need a speaker?
- Please share your good experiences with Michael Gray, CPA
- Financial Insider Weekly broadcast schedule
- Follow me on social media!
- Check out my blog
- Do you know about our other newsletters?
- Consult with a tax advisor
- Subscribe to Michael Gray, CPA’s Option Alert
Dawn Siemer’s working hours have changed
Dawn Siemer’s working hours have changed to 9 a.m. to 5 p.m.
Pacific Time on Mondays, Tuesdays and Thursdays. You can still
reach her at (408) 918-3162 and leave a message any time.
Extended individual income tax returns are due October 15
October 15 is the due date for extended individual income tax
returns. Get the information to finish your tax returns to your
tax return preparer right away. If you need us to prepare your
tax return, call Dawn Siemer on Monday, Tuesday, or Thursday at
408-918-3162 for an appointment.
IRS issues audit guide for equity compensation
The IRS has issued a new audit techniques guide for equity
(stock) – based compensation.
This guide focuses on the employer.
For publicly-traded stock, the auditor is directed to study
documents including Forms 10-K, S-3 and 4 filed with the SEC.
The auditor is also directed to determine whether an employee is
an insider subject to SEC Section 16(b).
The auditor is also directed to read minutes of the company’s
compensation committee and board of directors.
The auditor is directed to determine whether the stock was
actually transferred, what happened with notes received from
employees in payment for their stock, whether the stock was
vested and whether Section 83(b) elections were made by
The auditor is directed to determine whether employee stock
options have been transferred to related persons and whether
payroll taxes were properly withheld.
The auditor is also directed to determine whether the compliance
requirements for incentive stock options and employee stock
purchase plans were satisfied.
It’s interesting to note there isn’t much discussion of the
pricing requirements under Section 409A in the audit guide. This
is a major concern for equity-based compensation and should be
included in future versions of the guide.
The guide is actually fairly brief. My printed copy is only six
(Equity (Stock) – Based Compensation Audit Techniques Guide
California conformity bills await the governor’s approval
California’s legislature has sent two major bills to Governor
Brown for his approval.
AB 99 (Perea) would extend California’s partial conformity to the
exclusion of cancellation of indebtedness income for 2014 only.
Many taxpayers have extended the due date for filing their 2014
California income tax returns, hoping this relief would be
AB 154 (Ting) will update the conformity date of California’s
income tax laws to January 1, 2015, for tax years beginning on or
after January 1, 2015. There are still exceptions to the rules.
For example, bonus depreciation, the Section 179 expense
election, and real estate professional status will continue to be
different for federal and California income tax reporting. This
legislation will make preparing California income tax returns
(Spidell’s Flash Email: “Two big conformity bills await
Governor’s signature”, September 2, 2015.)
Does your group need a speaker?
We are seeking opportunities to speak before groups. Topics include recent tax developments, tax issues relating to real estate, how estate planning has changed recently, tax issues relating to alternative investments using retirement accounts, and marketing topics such as “How I created a public access television show broadcast on eleven Bay Area stations.” To make arrangements, call Michael Gray at 408-918-3161.
Please share your good experiences with Michael Gray, CPA.
As you know, more and more people are going to the internet to find information about service providers. We hope you will share some good words about experiences that you have had with our firm<. Some of the sites where you can share your experiences include yelp.com, siliconvalley.citysearch.com, and Google+.
Financial Insider Weekly broadcast schedule for September and October.
Financial Insider Weekly is broadcast in San Jose and Campbell on Fridays at 9:30 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 September and October:
- September 25, 2015, Peggy Martin, ChFC, CLU, The Family Wealth
Consulting Group, “Legacy planning”
- October 2, 2015, William D. Mahan, attorney at law, of counsel to
Gates, Eisenhart, Dawson, “Why you need a will”
- October 9, 2015, William D. Mahan, attorney at law, of counsel to
Gates, Eisenhart, Dawson, “Tax considerations of title”
- October 16 and 23, 2015, Paul Duren, Bridge Bank, “Small business
- October 30, 2015, Professor Patricia Cain, Santa Clara University
School of Law, “Tax concerns of same-sex couples and unmarried
Financial Insider Weekly is also broadcast as follows:
- Sunday at 10:00 a.m. in San Mateo County on PenTV, Comcast Channel 26 and Astound Channel 27
- Sunday at 1 p.m. on Comcast channel 26 in Santa Cruz County and on Charter Communications Channel 72 in Watsonville and Capitola
- Monday at 7:00 p.m. Pacific Time on cable channel 19 in Morgan Hill and broadcast on the internet at the same time as streaming video at www.mhat.tv
- Monday at 6:30 p.m. on Midpeninsula Media Center, Comcast Channel 28 in Palo Alto, East Palo Alto, Stanford, Menlo Park & Atherton
- Monday at 7:30 p.m. on Comcast channel 15 in Saratoga
- Monday at 10:00 a.m. in San Mateo County on PenTV, Comcast Channel 26 and Astound Channel 27
- Tuesday at 10:30 a.m. on Comcast channel 26 in Santa Cruz County and on Charter Communications Channel 72 in Watsonville and Capitola
- Tuesday at 2:30 a.m. and 12:30 p.m. on Midpeninsula Media Center, Comcast Channel 28 in Palo Alto, East Palo Alto, Stanford, Menlo Park & Atherton
- Tuesday at 7:00 p.m. Pacific Time on cable channel 19 in Morgan Hill
- Wednesday at 8:00 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
- Thursday at 10:00 a.m. in San Mateo County on PenTV, Comcast Channel 26 and Astound Channel 27
- Friday at 1:30 p.m. in San Mateo County on PenTV, Comcast Channel 26 and Astound Channel 27
- Friday at 3:30 p.m. on KCAT, Comcast channel 15 in Los Gatos
- Friday at 4:00 p.m. on KMTV cable channel 15 in Cupertino, Los Altos and Mountain View
- 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”
- Friday at 8:00 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
- Saturday at 9:00 a.m. and 6:00 p.m. on Midpeninsula Media Center, Comcast Channel 28 in Palo Alto, East Palo Alto, Stanford, Menlo Park & Atherton
- Saturday at 10:00 a.m. in San Mateo County on PenTV, Comcast Channel 26 and Astound Channel 27
- Saturday at 1:00 p.m. on Comcast channel 26 and AT&T U-verse channel 99 in Marin County
Broadcast on the internet at the same time as streaming video at www.mhat.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!
Michael Gray regrets he can no longer answer emails personally. He will answer selected questions in this newsletter. Email your questions to email@example.com.
See the books mentioned at http://http://www.siliconvalleypublishingcompany.com/products/secrets-of-tax-planning-for-employee-stock-options-2014-edition or the Special Report, Nonqualified Stock Options – Executive Tax and Financial Planning Strategies at http://www.stockoptionadvisors.com/stock/nqso-faq/.
Follow me on social media!
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.
Check out my blog.
I have also started a blog at michaelgraycpa.com. Check it out!
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.
Consult with a tax advisor
For our readers who arenâ€™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.
Subscribe to Michael Gray, CPA’s Option Alert!
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