Backdating form 100 dating woman
It is not intended, and should not be regarded, as legal advice.
This additional taxable income will be subject to a 20% federal tax in addition to the regular tax rate, plus regular state income taxes (and possibly additional state penalty taxes). It is important to note that taxpayers generally have until December 31, 2007, to amend their discounted stock options to comply with § 409A (generally by increasing the exercise price to what was fair market value on the date the option was granted), but any pre-amendment exercise made in 2007, however, are subject to § 409A taxes.
Additional taxes could also be triggered for the employee (requiring tax withholding by the employer) upon exercise of a disqualified option (and taxes may have been overpaid in prior tax years, requiring preparation of amended returns, due to misclassified option exercises made in those years).
The third tax issue identified in the Directive relates to § 409A, which applies to any discounted stock options granted after December 31, 2004, as well as any earlier granted discounted stock options, with either: (a) vesting occurring after December 31, 2004, or (b) terms that are materially modified after October 3, 2004.
In particular, California takes the position that its tax code imposes a parallel tax to that imposed by § 409A, with the result that the income deemed recognized may be taxed at an aggregate rate (U. With respect to options granted to certain executives subject to the disclosure requirements of Section 16(a) of the Securities Exchange Act of 1934, the transition relief to cure disqualified options was only available through December 31, 2006.
The Directive includes a form IDR for use in any audit of backdated options.
The IRS's interest in the tax implications of backdated options is not new.