What is wrong with backdating stock options

This month marks our annual focus on personal financial planning.This issue builds upon the NYSSCPA's financial planner workshop held this past winter.

The tax consequences include taxation at the time of option vesting rather than the date of exercise or sale of the common stock, a 20% additional federal tax on the optionee in addition to regular income and employment taxes, potential state taxes (such as the California 20% tax) and a potential interest charge.

Background On April 10, 2007, the Internal Revenue Service (IRS) issued final regulations under Section 409A of the Internal Revenue Code.

Section 409A was added to the Internal Revenue Code in October 2004 by the American Jobs Creation Act.

"I enjoy the online CPE because it allows for me to stay up-to-date with pertinent accounting issues while studying on my own time.

I can pause the sessions and resume at my convenience.

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