tax implications on options

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Subject Author Date tax implications on options bob 09-10-2008  Re: tax implications on options Mark Bole 09-10-2008  Re: tax implications on options Bob Sandler 09-10-2008  Re: tax implications on options dpb 09-11-2008   Re: tax implications on options Steve Pope 09-11-2008
Posted by bob on September 10, 2008, 8:40 pm Please log in for more thread options My company is about to be acquired. I have both vested and non vested options that will mature shortly, and it is a cash buyout. Does anyone have any suggestions on how I can avoid all the profits to be labeled as ordinary income? -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Mark Bole on September 10, 2008, 9:53 pm Please log in for more thread options bob wrote: > My company is about to be acquired. I have both vested and non vested > options that will mature shortly, and it is a cash buyout. Does > anyone have any suggestions on how I can avoid all the profits to be > labeled as ordinary income? > I wouldn't try to avoid the profits, I'd grab for all I could get, regardless of how they are labeled. You might get some favorable tax treatment if your options are qualified incentive stock options (ISO), but the dual holding requirements for capital gains treatment of ISO's don't apply to your situation as you described it. You don't even state what type of options you have. -Mark Bole -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Bob Sandler on September 10, 2008, 10:55 pm Please log in for more thread options >and it is a cash buyout. You need to clarify exactly what that means. If they are just buying out your options for cash, then you are not exercising the options. It's the same as a bonus paid in cash. It will be included in your W-2 wages and taxed as ordinary income. There is nothing you can do to change that. Ask the company if that's what they are going to do. Bob Sandler -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by dpb on September 11, 2008, 10:27 am Please log in for more thread options bob wrote: > My company is about to be acquired. I have both vested and non vested > options that will mature shortly, and it is a cash buyout. Does > anyone have any suggestions on how I can avoid all the profits to be > labeled as ordinary income? Let them expire??? :) (Sorry, couldn't restrain myself...) -- -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Steve Pope on September 11, 2008, 6:04 pm Please log in for more thread options >My company is about to be acquired. I have both vested and non vested >options that will mature shortly, and it is a cash buyout. Does >anyone have any suggestions on how I can avoid all the profits to be >labeled as ordinary income? The only clean shot I can see is if the acquiring company has a deferred compensation plan, if their plan will let you defer a large percentage of the compensation associated with the options, and if you consider them reliable/creditworthy enough that you want to do this. These are three big ifs, but it's not impossible. Talk immediately to those responsible, before you actually see the cash. Steve -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Tax Implications/Options for Sale of Rental Property? 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