They've Syme here again. I'm a securities attorney and I am also a principal in Tartan Capital Advisors. Today we have an interesting topic. Well, it's actually a boring topic, but you're going to find it very interesting because it has a significant impact on our clientele. That topic is stock option programs. There are two kinds of stock option programs, which makes it a little bit confusing. And then there's the 83(b) election, which puts a whole different color on the whole discussion. I wanted to go through this and explain to you what the statutory program is, what the non-statutory program is, and why 83(b) almost makes it so it doesn't matter. If you actually want to speed ahead in the video, you can cut to the chase and get to the bottom line. But let's go through it. I'll try to make it painless. So, a statutory stock option program is available only to employees of the company. Not consultants, not attorneys, not friends, not vendors. It's just for employees. When the options are initially granted, it's not a taxable event. When the stock person converts from the option into the stock, that's also not a taxable event. That's important. Finally, when they go and actually sell the stock, that's when it's a taxable event. Now, there's a question when they finally sell the stock, which is the only taxable event. Is it considered long-term capital gains or short-term capital gains? Short-term capital gains is ordinary income, just like W2 earnings. So, you don't want that. Anyone would avoid that. The rule is, in order for the ultimate sale to be considered long-term capital gains, it has to be either two years from the date that the option was granted or one year from the date it was exercised. If...
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Nonstatutory stock options reported on w-2 Form: What You Should Know
Complete and sign (e.g., “Make this donation) and return to sender on your own return. See Instructions for Form 1099-DIV for more info. Desktop: Form 1099-DIV — Dividends and Distributions Sep 22, 2024 — Amount from Boxes 2a and 3a, any additional deductions for certain distributions from taxable years starting before 2017, and the maximum individual deduction. See Note on Maximum Individual Deduction, later. Sep 23, 2024 — The amount from Boxes 1a, 1b,2a, 3a, 4a, 5a and 7a, any additional deductions for certain distributions for taxable years ending after 2009, and the maximum individual deduction. See Note on Maximum Individual Deduction, later. Sep 23, 2024 — Taxes in Box 7 of Schedule D (Form 1040), including, but not limited to, all applicable capital gains taxes; the total exclusion from gross income of all nonqualified deferred compensation to you (including any such deferred compensation received by you during 2018, 2019, 2024 and 2021); the deduction for reimbursed management fees for the current or a prior taxable year; and, if any, the total dollar limit for qualified retirement plans and individual retirement plans of the taxpayer. See the instructions for your form in Part II of the Instructions for Schedule D. This is a summary of the information required only in Box 7. Sep 24, 2024 — Any additional amount from Boxes 1a, 1b, 2a, 3a, 4a, 5a, 7a, 8a, 9a, 10a, 11a, 12a, 13a, 14a, 15a, 16a, or 17a. See Part II of the Instructions for Form 1099-DIV for further details. Sep 24, 2024 — Net investment income, net short-term and long-term capital gain interest, net long-term gain or loss, and net retirement income. The information shown is for the last five years before you Jan 21, 2024 — From 2024 to 2028, when a qualified health plan's health insurance premium tax credit and the cost-sharing reduction may not be claimed, a person's net investment income, net short-term and long-term capital gain interest, net long-term gain or loss, and net retirement income may be included.
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