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Trump tax bill Sec 3801 – Stock options become taxable upon vest
11 points
seattle_spring
9 years ago
According to the recently proposed tax overhaul, Section 3801, stock options would be taxable immediately upon vesting.

The bill is extremely copy/paste unfriendly, but the full text is here: https://www.scribd.com/document/363309136/Republican-Tax-Bill#download&from_embed

The relevant section starts on page 295.

  16 (a) IN GENERAL.—Any compensation which is de-
  17 ferred under a nonqualified deferred compensation plan
  18 shall be includible in the gross income of the person who
  19 performed the services to which such compensation relates
  20 when there is no substantial risk of forfeiture of the 
  rights
  21 of such person to such compensation.
... and ...

  24 The term 'nonqualified deferred compensation
  25 plan' shall include any plan that provides—
  1 ''(i) a right to compensation based on
  2 the value of, or appreciation in value of, a
  3 specified number of equity units of the
  4 service recipient, whether paid in cash or
  5 equity, or
  6 ''(ii) stock appreciation rights or stock
  7 options.
Can anyone who understands legalese shed some light on exactly what that will mean for those of us with stock option-based compensation?
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