What is california qualified stock option

What is california qualified stock option

Author: maha Date: 12.06.2017

I'd like to know how to roughly calculate tax for stock options, for the following fictitious scenario:.

Suppose Little Susie joined a rare private company in California as a normal employee, and Little Susie is granted some ISO stock options. These stock options are not forward exercisable. However, she has strong faith that the company will do well and IPO some time in the future.

Or does she have to include her salary on top of that before calculating AMT?

what is california qualified stock option

Suppose in the worst case, the company goes completely under. Does she get her massive amounts of tax back? Or if it's tax credit, where can I find more info on this? Any advice for Little Susie on how she can even afford to pay that much tax on something she can't even sell anytime soon?

Should she take out a loan? I've also heard that you can sell your illiquid shares on SecondMarket? Fake scenario aside, I will still seek professional services to file my taxes next year I'm guessing a CPA can do this? All her income is included in calculating the AMT, minus the AMT exemption amount.

The difference between the regular calculated tax and the calculated AMT is then added to the regular tax. Note that some deductions allowed for the regular calculation are not allowed for the AMT calculation.

California Qualified Stock Option - How is California Qualified Stock Option abbreviated?

California has its own AMT rules, and in California any stock option exercise is subject to AMT, unless you sell the stock in the same year. Here's a nice and easy to understand write up on the issue from the FTB. Tax is due when income is received i.

However, most people don't actually pay the tax then, but rather discover the huge tax liability when they prepare to submit their tax return on April 15th.

To avoid that, I'd suggest trying to estimate the tax and adjust your withholding using form W4 so that by the end of the year you have enough withheld. You asked and answered. Yes, filing 83 b election is the way to go to avoid this situation.

I do not have California Qualified Stock Option Income, do I put - TurboTax Support

This should be done within 30 days of the grant , and submitted to the IRS, and a copy attached to the tax return of the grant year. However, if you're considering exercise - that ship has likely sailed a long time ago. Is she likely to get audited by IRS for pulling something like this?

what is california qualified stock option

You can take a loan secured by shares you own, there's nothing illegal in it. If you transfer your shares - the IRS only cares about the taxes being paid, however that may be illegal depending on the terms and the conditions of the grant.

You'll need to talk to a lawyer about your situation. By posting your answer, you agree to the privacy policy and terms of service. Sign up or log in to customize your list. Stack Exchange Inbox Reputation and Badges. Questions Tags Users Badges Unanswered.

Corporate Finance: Qualified vs. Nonqualified Stock Options

Join them; it only takes a minute: Here's how it works: Anybody can ask a question Anybody can answer The best answers are voted up and rise to the top. I'd like to know how to roughly calculate tax for stock options, for the following fictitious scenario: How does California state tax come into play for this? When would she have to pay the taxes for this huge AMT? Is there any way to avoid this tax? Can she file an 83b election?

Dzt 1 Well, not exactly , Don't exercise the options?

Sign up or log in StackExchange. Sign up using Facebook. Sign up using Email and Password. Post as a guest Name. MathOverflow Mathematics Cross Validated stats Theoretical Computer Science Physics Chemistry Biology Computer Science Philosophy more 3. Meta Stack Exchange Stack Apps Area 51 Stack Overflow Talent.

inserted by FC2 system