Recommend Our Site to Your Friends!

Print This Page

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?

The website for the Employee Stock Option Advisors Association, LLC is an outstanding reference for developments, questions and answers about employee stock options.

Included at the site is an archive of back issues of the ESOAA Option Alert newsletter. Each issue includes the latest tax developments for employee stock options, plus questions from our readers with answers. Only the current issue is available for visitors to study at no charge.

The site also includes other questions and answers about employee stock options and planning articles. Here are some examples of our articles:

• The Amazing Disappearing AMT Credit.
• Employee Stock Purchase Plans Compared to Incentive Stock Options
• Stock Market Decline with Employee Stock Options
• Non-Discrimination Requirement Proposed for Employee Stock Options
• New Employee Stock Purchase Plan Incentive Proposed
• Brokers Need Not Report Same Day Sales on Form 1099B
• IRS issues guidance for dividing non-qualified options in a divorce
• Are employee options "against the ropes"?
• Ignorance is not excuse - employee can't revoke Section 83(b) election

Here are some questions we've answered:

• What are the tax consequences of receiving incentive stock options?
• How is an ISO loss treated on tax returns?
• Do I need to pay estimated taxes after exercising ISOs?
• How should I compute the basis of stock in ISO sales following exercise?
• How are ISOs treated for AMT purposes?
• Can I use my AMT credit to reduce my regular tax?
• How can I avoid AMT taxes for a higher spread than exists now?
• Can I use a capital loss to offset my AMT liability?
• Do the wash sale rules apply to the alternative minimum tax?
• Do I need to pay AMT on my private company stock?
• How can I lower my taxes if my stock options have declined in value?
• Can gains from a disqualifying disposition offset capital losses?
• How important is it to file the 83(b) within 30 days of purchasing options?
• What taxes are due on ISO same-day sales?
• Are the rules different for AMT if you pay with company stock instead of cash?
• Is there a limit to the number of ISO's that can be granted to an employee?
• How could I figure out whether it's best to exercise and hold or just exercise?
• Can I lower my taxes by buying and holding my non-qualified stock options?
• If I worked in one state and live in another, in which state are my NQSOs taxed?
• What are the real advantages of incentive stock options vs non-qualified options?

The author of these materials is Michael Gray, CPA. Michael Gray is the co-founder of the Employee Stock Option Advisors Association, LLC, 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.

Here's what people have had to say about our website:

"Nice article on stock options. It's the first I've read that covers the topic in a comprehensive fasion."
--Frank Palermo, INSCI Corp.

"I enjoyed the ISO article and my visit to your web-ste. It's nice to find someone that is heavily involved with stock options and AMT."
--Al Nelson, EA

"Clear and concise answers to questions."

-- Elizabeth Sellers

Michael Gray regrets he can no longer answer questions directly. He answers selected questions in the ESOAA Option Alert newsletter.

Each month, a password will be emailed to website subscribers. This password is your key to our vault of tax planning secrets for employee stock options stored on our site. The user's fee will be charged monthly to the subscriber's credit card account. Your subscription will continue until you cancel it.

Your subscription is unconditionally guaranteed. If you are dissatisfied for any reason, you may cancel your subscription and request a no questions asked refund of up to three months' user's fees. You are the sole judge.

This information is provided as a service with the understanding that we are not providing tax or legal advice. The tax laws and other laws for employee stock options are constantly changing, which can make some answers obsolete. The terms for option plans for your company may be customized and not fit the general fact patterns discussed at the site. Some of the suggestions in our answers may not be appropriate for your individual tax situation. We highly recommend that you consult with a competent tax advisor.

Tax advisors should view this material as a reference to become aware of issues relating to employee stock options for further research and study.

As an option holder or as a tax advisor, you will find our site to be an indispensable reference that you will visit again and again.

The monthly investment is $19.95. Michael Gray's consulting rate is $345 per hour. When you consider the hours of effort to develop the materials at the site, it could easily exceed a value of $10,000 or more.

A tax planning idea from the site could save hundreds of thousands of dollars in taxes or help you avoid financial distress. Become an ESOAA website subscriber today!

Yes! I want the key to your vault of tax planning secrets for employee stock options! Sign me up as a subscriber to the Employee Stock Option Advisors Association, LLC website.

Please charge my credit card each month for the 19.95 access fee.

P.S. A tax planning idea from the site could save hundreds of thousands of dollars in taxes or help you avoid financial distress. Subscribe to our website today for just $19.95 per month!