Tax Planning for Retirees

Employee Stock Options

  • § 11.01 Overview of Taxation of Employee Stock Rights
  • —–[1] Statutory Stock Options
  • —–[2] Incentive Stock Options (ISOs)
  • —–[3] Stock Options Under Employee Stock Purchase Plans (ESPPs)
  • —–[4] Conditions on Favorable Treatment of Statutory Stock Options
  • —–[5] Nonqualifying Transfers or Dispositions of Statutory Stock
  • —–[6] Statutory Options and Stock After Death of Participant
  • —–[7] Transfers of Statutory Options or Stock Incident to Divorce
  • —–[8] Incentive Stock Price Paid with Previously-Acquired Employer Stock
  • —–[9] Alternative Minimum Tax (AMT) Treatment of ISOs
  • —-[10] No Withholding on Statutory Stock Options or Statutory Stock
  • —-[11] Stock Received upon Exercise of a Nonstatutory Stock Option
  • —-[12] Election for Unvested Stock Received upon Exercise of a Nonstatutory Stock Option
  • —-[13] Treatment of Forfeitures of Nonstatutory Stock
  • —-[14] Taxation of Stock Appreciation Rights (SARs or Phantom Stock)
  • § 11.02 Statutory Employee Stock Options
  • —–[1] Statutory Employee Stock Options Generally
  • —–[2] Employee Incentive Stock Options (ISOs)
  • ———-[a] Definition of Incentive Stock Options (ISOs)
  • ———-[b] Treatment of Qualifying ISO Exercises and Stock Dispositions
  • ———-[c] Treatment of Nonqualifying ISO Exercises or Stock Dispositions
  • ———-[d] Treatment of ISOs and Incentive Stock after Participant’s Death
  • ———-[e] Option Price Paid with Previously-Acquired Stock of the Employer
  • ———-[f] Unfavorable Alternative Minimum Tax (AMT) Treatment of ISOs
  • ———-[g] Transfers of ISOs or Incentive Stock Incident to Divorce
  • —–[3] Employee Stock Purchase Plan Options (ESPP Options)
  • ———-[a] Definition of an Employee  Stock Purchase Plan (ESPP)
  • ———-[b] Treatment of Qualifying ESPP Option Exercises and Stock Dispositions
  • —————[i] Conditions on Favorable Tax Treatment of ESPP Options and Stock
  • —————[ii] Favorable Treatment Given ESPP Options and Stock
  • ———-[c] Treatment of Nonqualifying ESPP Option Exercises or Stock Dispositions
  • ———-[d] Treatment of ESPP Options and Stock after Participant’s Death
  • ———-[e] Transfers of ESPP Options or Stock Incident to Divorce
  • —–[4] No Tax Withholding on Statutory Stock Options or Statutory Stock
  • § 11.03 Nonstatutory Employee Stock Rights
  • —–[1] Nonstatutory Employee Stock Rights Generally
  • —–[2] Nonstatutory Employee Stock Options
  • ———-[a] Nonstatutory Stock Option with Readily Ascertainable Fair Market Value
  • ———-[b] Nonstatutory Stock Option Without a Readily Ascertainable Fair Market Value
  • —————[i] Income Recognition on Sale or Exercise of the Option or Vesting of the Stock
  • ——————–[A] Income Recognition on Sale, Exercise, or Vesting Generally
  • ——————–[B] The Election to Report Income on Receipt of Unvested Stock
  • ——————–[C] The Meaning of Substantial Risk of Forfeiture
  • ——————–[D] Examples: Income Recognition on Option Exercise or Vesting/Sale of Stock
  • —————[ii] Option Price Paid with Previously Acquired Stock of the Employer
  • —————[iii] Taxation of Dividends on Nonstatutory Stock
  • —————[iv] Treatment of Forfeitures of Nonstatutory Stock
  • —————[v] Taxation of Proceeds from the Sale of Nonstatutory Stock
  • —————[vi] Gift of Unvested Nonstatutory Stock
  • —————[vii] Transfers of Nonstatutory Options or Stock Incident to Divorce
  • —————[viii] Death of Participant Before Vesting of Nonstatutory Stock
  • —————[ix] Tax Withholding on Exercise of Nonstatutory Stock Options
  • —–[3] Hypothetical Stock Ownership Rights
  • —–[4] Avoiding 409A Penalties and Interest Under a Nonstatutory Stock Rights Plan
  • § 11.04 Stock Options Treated as Golden Parachute Payments
  • § 11.05 Qualified Small Business Stock Acquired from Employer
  • —–[1] Exclusion of Gain on Qualified Small Business Stock (QSB Stock)
  • —–[2] Requirements for Qualification as QSB Stock
  • —–[3] Tax-Free Rollover of Proceeds from Sale of QSB Stock
  • § 11.06 Uncertain Applicability of the Tax on Net Investment Income

» Chapter 12 – RETIRING PARTNERS AND SOLE PROPRIETORS