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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Monday, April 3, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will discuss the tax implications of incentive stock options (ISOs), non-qualified stock options, ESPPs, and restricted stock units (RSUs). Compensating employees with stock allows them to purchase company stock and to share in the success and appreciation of the company. The type of incentive determines when, how, and whether a stock is taxed, either along the way or at the sale of the stock. So, a tax practitioner must understand the differences between these types of plans. The panel will explain how and when each type is taxed, the best tax strategies for each award type.

Faculty

Shawn E. Lampron
Partner
Fenwick & West LLP

Ms. Lampron focuses her practice on executive compensation and employee benefits for emerging growth businesses, public companies, and venture and institutional investors. She works with clients to structure compensation and benefit programs covering the full spectrum of equity and cash compensation arrangements, including all types of employee stock options, restricted stock, employee stock plans, employment agreements, deferred compensation, and other fringe benefit arrangements. Ms. Lampron was most recently part of the team that represented Fitbit in its $732 million IPO in June 2015.

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Marlene Zobayan
Partner
Rutlen Associates, LLC

Ms. Zobayan has over twenty years of international tax and benefits experience, including global equity plans, mobile employee taxation, global compensation and benefits. She provides a range of services to her clients, including global equity plan design, tax reviews and tax optimization, assistance with local approvals and filings, communications, and designing administrative processes. She is a regular speaker and author on global stock plan and rewards issues. Prior to joining Rutlen Associates, she was the practice leader on the West Coast for Deloitte Tax's Global Rewards group and managed their news alerts for global equity plan changes.

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Description

ISOs trigger no tax until sold. However, non-statutory or non-qualified stock options are taxed on exercise. RSUs aren't options at all; these are a promise to deliver stock at a future date.

The terminology that surrounds these plans is unique. Necessary chronological terms include dates of the grant, vesting, exercise, and sale. Depending on the type of award, the acquisition of stock may be taxed at any of these dates and may be subject to tax at ordinary income, capital gains, AMT rates, or a combination of the three.

One of the biggest hurdles and the key to accurately reporting these transactions is piecing together the necessary documentation. The taxpayer may have received--and hopefully retained--an explanation from the company, Forms 3921 or 3922, details of a cashless sale, and (or) Form W-2. This needed documentation often spans years, from the grant date to the date of sale.

Given recent market trends, many private companies have seen valuations decline significantly, resulting in an increasing number of service providers holding “underwater” or “out of the money” stock options. As a result, companies may be considering repricing their stock options to help retain and appropriately incentivize employees and other service providers by reducing the exercise price of stock options.

Listen as our panelists answer frequently asked questions from companies that are contemplating a stock option repricing, explain the types of stock plans available, how and when each is taxed, and tips to minimize the tax paid on these incentives.

Outline

  1. Incentive stock options
  2. Non-qualified stock options
  3. ESPPs, qualified and not
  4. RSUs
  5. Other stock plans
  6. Repricing
  7. Other considerations in light of the current economy

Benefits

The panel will review these and other important issues:

  • Recognizing ISOs, NSOs, ESPPs, and RSUs
  • Discerning taxation timing and rate differences between the most common stock plans
  • What documentation is needed to properly report stock transactions
  • Considerations for non-U.S. employees
  • Equity compensation and remote workers
  • Issues to consider when granting stock options to PEO or EOR employees
  • How and when taxpayers can garner benefits of repricing stock options

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Recognize ISOs, NSOs, ESPPs, and RSUs
  • Discern taxation timing and rate differences between most common stock plans
  • Determine how and when taxpayers can garner benefits of repricing stock options
  • Establish the available tax advantages for both employers and employees and any conflict
  • Verify whether dispositions are qualifying or disqualifying

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and sole proprietorships, qualified business income, net operating losses and loss limitations; familiarity with net operating loss carry-backs, carry-forwards and carried interests.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).