Special Internet Offer for
Secrets of Tax Planning For Employee Stock Options 2009 Edition
Will you (or your client) owe a tax without having the cash to pay it?
- What are four alternative scenarios to consider when evaluating risk and tax results when planning?
- What is the "escape hatch" and when should you use it?
- What tax rates apply in different scenarios, and how do they relate to evaluating risk?
- What are the mechanics of the alternative minimum tax and the minimum tax credit?
- How does the new refundable minimum tax credit work?
- How can the estimated tax rules be used to manage cash flow?
- What are the tax results of "hedging" strategies?
- What are special considerations when an early exercise is allowed?
- What special considerations apply for "insider" stock?
- What are the tax consequences of backdating ISOs?
- What general rules apply when non-qualified stock options are exercised?
- When is stock considered "restricted", and what special elections apply in those situations?
- When do you make a "Section 83(b)" election?
- What are the tax consequences of a forfeiture after a Section 83(b) election has been made?
- How can non-qualified stock options avoid severe penalties for non-qualified deferred compensation plans under Internal Revenue Code Section 409A?
- What are the tax consequences of backdating employee stock options?
- How does an employee stock purchase plan compare to incentive stock options?
- Does the alternative minimum tax apply to ESPPs?
- How is a stock grant taxed?
- When would you make a Section 83(b) election for a stock grant?
- What are state tax consequences when an employee moves?
- What are employee benefits of ESOPs?
- What are the tax breaks for a sale by an existing shareholder to an ESOP?
- What diversification elections are available for employees?
- What are the distribution requirements after an employee retires?
- Co-author of Employee Stock Options – A Strategic Planning Guide for the 21st Century Optionaire, published by Stillman Publishing.
- Owner of Michael Gray, CPA, founded in 1996.
- Author of Michael Gray, CPA’s Tax and Business Insight and Michael Gray’s Option Alert monthly newsletters.
- Past President, Silicon Valley San Jose Chapter, California Society of Certified Public Accountants.
- Partner, Hubler, Gray and Associates, CPAs, 1986 – 1996.
- Former chairman of Tax Committee, San Jose, CPAs
- Former member of Tax Committee, California CPAs.
- Tax Manager, KMG Main Hurdman (subsequently acquired by Peat Marwick), 1978 – 1986.
- Accountant, Berger, Lewis & Company 1974 – 1978.
- Author of and contributor to articles in various publications, including The Wall Street Journal, The New York Times, San Francisco Chronicle and San Jose Mercury News.
- Black Belt, West Coast Tae Kwon Do
- Performed in Will Rogers Follies, Carousel, and South Pacific with West Valley Light Opera.
- Timely reminders each quarter, with follow-up.
- Clear explanations & sound advice on complex stock option rules.
- Dependable & trustworthy."
Studying this book could save your family from bankruptcy and avoid severe emotional distress from unexpected tax bills!
3:35 p.m.
Good afternoon,
Could this happen to you?
"In January, 2000 I exercised the majority of my shares of a pre-IPO company that eventually went public. My strike price on these shares ranged from about $1 to $8, and I exercised all these shares (when the fair market value was) around $129. My intention was to hold them until at least January 2001, which would have qualified these stocks for the "2 year, 1 year" rule and would qualify for long-term capital gains."
"Well, you can probably guess what happened next. My stock is hovering at about $40. To my understanding, if I hold the stocks into next year, I would have to pay AMT on the stock at $129. Well, basically, I would have to sell all the stock just to be able to pay the AMT consequences."
This is part of a letter we received from one of our newsletter readers. Many employees who have been granted stock options discover, too late, they had been handed a loaded gun that they accidentally shot themselves with.
After the market crash in 2001, I attended a "town hall" meeting where options holders shared their experiences of emotional distress so severe that they lost their hair. They were also afraid of going bankrupt and losing their homes.
Who is Michael Gray, CPA?
My name is Michael Gray. I’m a certified public accountant (CPA). Back in 1985, I assembled a study about the tax consequences of different employee stock options and made a presentation on the subject for the tax partners and managers of a national CPA firm, and I’ve continued to advise clients in this area ever since.
I am the principal author of a monthly newsletter, Michael Gray, CPA’s Option Alert, author of Secrets of Tax Planning For Employee Stock Options and Executive Tax Planning For Employee Stock Options, and the co-author of Employee Stock Options – A Strategic Planning Guide for the 21st Century Optionaire.
Because of the many questions we are receiving from our readers, we know people with options need help but often haven’t been able to find it from their local tax advisors. Some have been getting erroneous advice from their advisors but have no way to know if that advice is reliable or not. Following erroneous advice can result in thousands, sometimes millions of dollars in additional taxes and penalties.
I have just updated a comprehensive explanation, Secrets of Tax Planning for Employee Stock Options - 2009 Edition.
Like having a personal consultation with an expert on planning for employee stock options.
Reading this material is like sitting across the table from me in a consultation, at a fraction of the investment. My consultation fee is $430 an hour. I invested hundreds of hours in assembling this material for you. If we were conservative and said you received ten hours of advice, the value would be $4,300. But the total investment is less than the cost of one hour. More importantly, the information in this material could save you (or your clients) thousands, possibly millions of tax dollars and penalties!
"Michael Gray’s book on tax planning for stock options, stock grants and ESOPs is a must have for any tax professional working with clients who have such assets. It has to be the most complete discussion and guidance available for all the nuances of the myriad tax rules that apply, including the AMT and its confounding carry over credits. He uses example after example to aid the reader in comprehending the tax consequences of every possible situation. I say this as a tax attorney with over 40 years of experience in Silicon Valley."
John Hopkins, Esq.
Hopkins & Carley
San Jose, California
What’s included
Secrets of Tax Planning for Employee Stock Options includes explanations of employee (and independent contractor) planning for Incentive Stock Options, Non-Qualified Stock Options, Employee Stock Purchase Plans, Stock Grants and Employee Stock Ownership Plans (ESOPs).
While each of these types of plans represent significant benefits for employees (non-qualified options are also available for non-employees), they also include tax traps that can result in a huge tax without having the cash to pay it.
I have included, word for word, my initial consultation presentation explaining how incentive stock options work.
Also, I have included step-by-step examples illustrating various concepts.
What’s been updated?
Every year, Congress passes new tax laws. Last year, many of those laws affected the taxation of employee stock options. Secrets of Tax Planning for Employee Stock Options, 2009 Edition is up to date as of June 5, 2009.
The biggest development since 2007 is the expanded refundable minimum tax credit. The credit is no longer phased out for high-income individuals. In addition, taxpayers who paid penalties and interest relating to an alternative minimum tax for exercising an incentive stock option can recover those amounts as part of the credit. Knowing how to claim this credit could save you or your clients a lot of money! A discussion of the enhanced refundable minimum tax credit has been added to the text.
Some speculation about the upcoming changes in the tax laws under the Obama administration and their impact on tax planning for employee stock options has been included.
Examples have been updated for more recent tax rates, and the appendix was updated to include the latest (2008) forms, instructions and publications available at the time I finished the book, making it easier for you to apply lessons learned from our book to this year’s taxes. Publication 525, Taxable and Nontaxable Income, which includes a section on employee stock options, and ILM 200728042, an IRS Internal Legal Memorandum explaining the application of Section 409A to nonqualified stock options, have also been added to the appendix.
Information reporting for exercising an incentive stock option has been enacted. The IRS has issued proposed regulations about the new forms. These are explained.
Special estimated tax rules enacted for 2009 for certain individuals who receive most of their income from a small business are explained.
The uncertain status of the estate tax exemption is highlighted.
New rules for expatriates who renounce their US citizenship or permanent residency are discussed. Knowing about these rules in advance could save you or your clients from making a costly mistake!
The IRS has been issuing additional details about how the new non-qualified deferred compensation rules under Internal Revenue Code Section 409A work, including extensions for the written plan requirement. The application of these rules to employee stock options is incorporated in the text, including a discussion of an Internal Legal Memorandum that may not be widely known.
Want to protect yourself from a big drop in the stock price of your company? The section on hedging to protect against losses has been expanded.
A number of new cases, rulings and regulations have also been added to citations in the text, so you’ll know what to expect if you’re in a similar situation.
Here are some of the subjects discussed:
Incentive Stock Options
Non-Qualified Stock Options
Employee Stock Purchase Plans
Stock Grants
ESOPs
What is the investment for the book?
The investment for the book when it is generally distributed will be $199.95. When you buy it from this offer no later than August 31, 2011, the investment is 25% off –- $149.95 plus $15 shipping and handling and $13.61 California sales tax for California residents.
Looking for something more basic? Take a look at Employee Stock Options: Executive Tax Planning 2008 Edition.
But wait! There’s more!
As an additional bonus, you’ll receive an Excel spreadsheet for tracking the tax basis of stock acquired by exercising an incentive stock option and another spreadsheet for allocating interest from a margin account to determine how to allocate and deduct the interest expense.
Unconditional Guarantee
You must find this the most valuable reference you have ever seen about Employee Stock Options, Stock Grants and ESOPs or simply return the course for a no-hassle immediate refund of your investment.
I’m looking forward to helping you with your questions relating to employee stock options, stock grants and ESOPs!
May your options increase in value!
Michael C. Gray
mgray@stockoptionadvisors.com
P.S. Remember, you must order Secrets of Tax Planning For Employee Stock Options – 2009 Edition no later than August 31, 2011 to be eligible for the special 25% off offer of $149.95 plus $15 shipping and handling and $13.61 sales tax for California residents. You will also receive the Interest-Tracing worksheet, and the Worksheet to Trace Incentive Stock Option exercises as our bonus gift.
P.P.S. For free, up-to-date information about the tax repurcussions of employee stock options, visit our Stockoptionadvisors website.
© 2011 Michael Gray
Internet Offer Action Form
YES! I want to protect myself or my clients from a potential tax disaster by finding out the tax consequences of exercising my Employee Stock Options.
Please send me Secrets of Tax Planning For Employee Stock Options – 2009 Edition and my bonus Excel spreadsheets for Interest Tracing and Tracking Tax Basis Of Incentive Stock Option Shares.
My investment is only $149.95 (25% off the regular price of $199.95) plus $15 shipping and handling and $13.61 sales tax for California residents, when I order by August 31, 2011.
MY SATISFACTION IS GUARANTEED. If I don’t find this the most valuable reference I have ever seen about Employee Stock Options, I may simply return the course for a no-hassle immediate refund of my investment. I am the sole judge.
Name ___________________________________________________
Company Name ___________________________________________
Address _________________________________________________
City ________________________ State ______ Zip ______________
Home Phone _________________ Business Phone _______________
FAX ___________________ Email ___________________________
Date of Birth _____________________
Charge my Mastercard ____ Visa ___ American Express ___Discover _____
Credit card number ________________________________________
Expiration __________ Security code ____________
Card address, if different ______________________________
_________________________________________________________
Name on card ________________________________
Signature __________________________________ Date ____________
Amount ________________
You may also charge a second credit card card!
Charge my Mastercard ____ Visa ___ American Express ___Discover _____
Credit card number ________________________________________
Expiration __________ Security code ____________
Card address, if different ______________________________
_________________________________________________________
Name on card ________________________________
Signature __________________________________ Date ____________
Amount ________________
FAX to 408-998-2766
or mail to Silicon Valley Publishing Company
2190 Stokes St., Ste. 102
San Jose, CA 95128-4512
© 2009 Michael C. Gray
Who is Michael Gray, CPA?
Table of contents
| i. | Read this first | |
| ii. | Introduction | |
| 1. | Why are stock options and employee stock purchase plans so great? | 1-1 |
| 2. | Incentive Stock Options | 2-1 |
| The Basics | 2-1 | |
| What are the regular tax benefits of an incentive stock option? | 2-1 | |
| What happens if the holding period requirements aren’t met? | 2-2 | |
| What transactions can be disqualifying dispositions? | 2-3 | |
| What requirements must be met for an employee option to qualify as an ISO? | 2-3 | |
| The Alternative Minimum Tax | 2-6 | |
| Some AMT credit made refundable for 2007 through 2012 | 2-15 | |
| Refundable AMT Credit as amended, effective starting 2008 | 2-17 | |
| Other minimum tax credit changes, starting 2008 | 2-18 | |
| What is the "escape hatch," and why is it critically important? | 2-19 | |
| Is there an alternative approach to dealing with depreciated ISO stock? | 2-19 | |
| A strategic planning interview | 2-20 | |
| Estimated tax, withholding and timing | 2-27 | |
| The employer’s tax deduction | 2-29 | |
| Employer information reporting | 2-29 | |
| What is a "cashless exercise"? | 2-31 | |
| What are vesting and early exercise, and how does the Section 83(b) election work? | 2-32 | |
| Caution! AMT deduction limited for forfeiture! | 2-35 | |
| Other Restricted Stock | 2-36 | |
| Stock that isn’t publicly traded | 2-37 | |
| What happens if the employer reprices the options? | 2-37 | |
| Payment of option price with employer stock | 2-38 | |
| Is stock pyramiding advantageous for ISOs? | 2-41 | |
| What is a reload option? | 2-42 | |
| What happens when the employer company is acquired by another company? | 2-42 | |
| Stock option adjustment for a corporate split-up | 2-45 | |
| What happens when the employee stops working for the granting employer? | 2-45 | |
| Hedging to protect against losses | 2-45 | |
| Tandem stock options and stock appreciation rights | 2-49 | |
| How do I handle my wash sales? | 2-51 | |
| Non-qualified deferred compensation and ISOs | 2-52 | |
| Tax consequences of back dating | 2-52 | |
| Divorce | 2-53 | |
| Estate planning | 2-54 | |
| Considerations for expatriates renouncing US citizenship or permanent residency | 2-57 | |
| ISOs and ISO stock after a death | 2-59 | |
| State tax issues – the mobile employee | 2-61 | |
| 3. | Non-Qualified Options | 3-1 |
| The Basics | 3-1 | |
| Requirements for the option price | 3-1 | |
| Written plan requirement | 3-5 | |
| Publicly-traded non-qualified stock options | 3-6 | |
| Exercise of NQO effective on date notice delivered, not payment date | 3-7 | |
| Strategic planning for non-qualified options | 3-7 | |
| Estimated tax and withholding | 3-8 | |
| Requirements for deduction by employer | 3-11 | |
| What is a "cashless exercise"? | 3-11 | |
| Vesting and early exercise (Section 83 (b) election) | 3-11 | |
| Caution! Deduction limited for forfeiture! | 3-14 | |
| Other Restricted Stock | 3-15 | |
| Stock that isn’t publicly traded | 3-15 | |
| What happens if the employer reprices the options? | 3-16 | |
| Payment of option price with employer stock | 3-17 | |
| Is stock pyramiding advantageous for NQOs? | 3-19 | |
| What is a reload option? | 3-19 | |
| Payment for option using nonrecourse note | 3-20 | |
| What if the NQO fails the exception under the non-qualified deferred compensation rules? | 3-20 | |
| Can the income from a NQO be rolled over to a non-qualified deferred compensation plan? | 3-22 | |
| What happens when the employer company is acquired by another company? | 3-22 | |
| What happens in a corporate split-up? | 3-25 | |
| What happens when the employee stops working for the NQO-granting employer? | 3-26 | |
| Is the taxable income from exercising an NQO "compensation" for IRA contributions? | 3-26 | |
| Can a sale of options qualify for installment sale reporting? | 3-26 | |
| Hedging to protect against losses | 3-27 | |
| Tandem stock options and stock appreciation rights | 3-30 | |
| Tax consequences of back dating | 3-31 | |
| Divorce | 3-32 | |
| Estate planning | 3-33 | |
| NQOs after a death | 3-35 | |
| State tax issues – the mobile employee | 3-42 | |
| 4. | Employee Stock Purchase Plans | 4-1 |
| The Basics - What are the benefits of Employee Stock Purchase Plans (ESPPs)? | 4-1 | |
| What happens if the holding period requirements aren’t met? | 4-1 | |
| What is a disqualifying disposition? | 4-2 | |
| ESPP and ISO compared | 4-2 | |
| Updated employer guidelines issued | 4-5 | |
| Some planning considerations | 4-5 | |
| Estimated tax and withholding | 4-7 | |
| Employer information reporting | 4-9 | |
| What happens when the employer company is acquired by another company? | 4-9 | |
| Employer’s tax deduction | 4-11 | |
| What happens when the employee stops working for the ESPP-granting employer? | 4-11 | |
| Hedging to protect against losses | 4-12 | |
| Non-qualified deferred compensation and ESPPs | 4-12 | |
| Tax consequences of back dating | 4-12 | |
| Divorce | 4-12 | |
| Section 409A Deferred Compensation | 4-12 | |
| Estate planning | 4-12 | |
| ESPPs and ESPP stock after a death | 4-13 | |
| 5. | Stock Grants (Restricted Stock) (Including stock transfer in connection with the performance of services) | 5-1 |
| Introduction | 5-1 | |
| The Basics | 5-2 | |
| Strategic planning for stock grants | 5-3 | |
| Estimated tax and withholding | 5-4 | |
| Requirements for deduction by employer | 5-6 | |
| What if the service provider pays for stock using a nonrecourse note? | 5-7 | |
| Vesting (Section 83(b) election) | 5-7 | |
| Caution! AMT deduction limited for forfeiture! | 5-9 | |
| Other Restricted Stock | 5-10 | |
| Stock that isn’t publicly traded | 5-10 | |
| What happens when the employer company is acquired by another company? | 5-11 | |
| What happens when the employee stops working for the employer granting stock? | 5-13 | |
| How are dividends received relating to unvested stock taxed? | 5-13 | |
| Can a sale of unvested granted stock qualify for installment sales reporting? | 5-14 | |
| The new deferred compensation rules | 5-14 | |
| Back dating | 5-14 | |
| Divorce | 5-15 | |
| Estate planning | 5-15 | |
| Granted stock after a death | 5-19 | |
| State tax issues – the mobile employee | 5-20 | |
| Compensation limits for executives of companies receiving TARP assistance | 5-21 | |
| 6. | ESOPs | 6-1 |
| Some employer benefits of ESOPs | 6-1 | |
| Some employee benefits of ESOPs | 6-2 | |
| What kind of employer stock can be held by an ESOP? | 6-3 | |
| Tax break for sales by existing shareholders of employer corporation to an ESOP | 6-3 | |
| Voting rights | 6-5 | |
| Diversification election | 6-5 | |
| Distributions | 6-8 | |
| General rules | 6-8 | |
| Elective rules for ESOPs | 6-8 | |
| Net unrealized appreciation | 6-9 | |
| Protecting an S election | 6-9 | |
| Rights for distributions of employer securities | 6-10 | |
| Planning for termination of employment | 6-10 | |
| Tax planning for retirement | 6-11 | |
| Estate planning for ESOP accounts | 6-13 | |
| Handling ESOP accounts after a death | 6-15 | |
| Minimum required distributions for year of death | 6-15 | |
| Determining the designated beneficiary | 6-16 | |
| Minimum required distributions for years after death | 6-18 | |
| Spousal rollover | 6-21 | |
| SOSEPP exception | 6-22 | |
| Disclaimers | 6-23 | |
| Income with respect of a decedent issues | 6-24 | |
| Net unrealized appreciation of employer stock | 6-24 | |
| IRD deduction | 6-24 | |
| Is IRD triggered when funding formula pecuniary bequests to trusts? | 6-24 | |
| 7. | Related Issues | 7-1 |
| The swamped employee | 7-1 | |
| Diversification | 7-2 | |
| Payment for stock using notes | 7-4 | |
| How to identify securities sold | 7-4 | |
| Valuation of employer stock | 7-5 | |
| Strategies for when you don’t have the money to pay the tax | 7-6 | |
| Why I prefer to avoid extensions of time to file when a tax is due or there is a dispute about the value of employer stock | 7-8 | |
| The interest expense for your margin account may not be tax deductible! | 7-10 | |
| Worthless Stock | 7-12 | |
| 8. | Proposals for Tax Relief | 8-1 |
| Scrap the system? | 8-1 | |
| Employee option reform proposals | 8-2 | |
| 9. | Options comparison Chart | 9-1 |
| 10. | Bibliography | 10-1 |
| 11. | Appendix (items listed on this page) | 11-1 |
Appendix
| 2009 Projected Income Tax Rates | ||
| Form 2210, Federal Underpayment of Estimated Tax by Individuals, Estates and Trusts (with instructions) | ||
| Form 6251, Federal Alternative Minimum Tax – Individuals (with instructions) | ||
| Form 8801, Federal Credit For Prior Year Minimum Tax – Individuals, Estates and Trusts (with instructions) | ||
| Form P (540), California Alternative Minimum Tax and Credit Limitations – Individuals (with instructions) | ||
| Form 3510, California Credit for Prior Year Alternative Minimum Tax – Individuals (with instructions) | ||
| Sample Worksheets For ISO Exercise Carryover Information | ||
| Interest Tracing Worksheet Example | ||
| Section 83(b) Election Form | ||
| California Stock Option Guidelines, FTB Publication 1004 | ||
| IRS MSSP for Stock Based Compensation | ||
| IRS MSSP for Alternative Minimum Tax | ||
| Uniform Lifetime Table (joint lives) and Single Life Table for qualified retirement plan distributions (Treasury Regulations § 1.401(a)(9)-9 Q & A 2 and Q & A 1) | ||
| Unified Transfer (Estate and Gift) Tax Tables | ||
| IRS Publication 525 – Taxable and Nontaxable Income | ||
| ILM 200728042 – Service Rules on Application of Deferred Compensation Rules to Exercises of Backdated Stock Options |
Michael Gray is the Acknowledged Expert on Employee Stock Options!
Quoted in the Following Articles:
"Taxman cometh to valley," by Pete Carey and Mike Swift, San Jose Mercury News, March 1, 2009.
"Rescue bill offers relief to some valley taxpayers hit with the AMT," by Pete Carey, San Jose Mercury News, November 10, 2008.
"When to Exercise Options," by Arden Dale, The Wall Street Journal, March 27, 2008.
"CPA helps valley workers navigate their stock options," by Mark Schwanhausser, San Jose Mercury News, December 5, 2007.
"For option holders, what the options are," by Mark Schwanhausser, San Jose Mercury News, April 29, 2007
"Take stock of changes in purchase plans,", by Andrew Leckey, Los Angeles Times, March 27, 2005
"If your timing’s wrong even taking a profit can cost you a bundle," by Mark Schwanhausser, San Jose Mercury News, December 2, 2001
"Confusion on options can be hugely costly," by Mark Schwanhausser, San Jose Mercury News, Sunday, May 27, 2001
"Apathy, confusion leads to stock option blunder," by Mark Schwanhausser, San Jose Mercury News, Saturday, May 26, 2001
"Know the pros and cons of stock options," by Andrew Leckey, Milwaukee Journal Sentinel, May 3, 2001
"Options dream turns to nightmare," by Rachel Konrad, CNET News.com, April 16, 2001
"Tax man or grim reaper?" by Erik Linden, Silicon Valley Business Ink, April 13, 2001
"Options dream becomes a taxing nightmare," by Rachel Konrad, ZDNET News.com, April 13, 2001
"New Economy: Lose Money, Pay Tax," by Joanna Glasner, Wired News, April 6, 2001
"Take a Deep Breath, Get Out Your Checkbook And Pay Your Amts," San Jose Mercury News, April 3, 2001
"Burdened Taxpayers Figure Out How to Make a Deal with IRS," Mark Schwanhausser, San Jose Mercury News, Saturday, March 31, 2001
"Tax experts say where there’s a bill there’s a way," by Mark Schwanhausser, San Jose Mercury News, Saturday, March 31, 2001
Leading Professionals Recommend
Secrets of Tax Planning For Employee Stock Options, Stock Grants and ESOPS
"During the tech boom, Silicon Valley workers had surprisingly few places to turn for help with their stock options. Mike Gray was one of them, providing and authoritative voice of prudence in a time of irrational exhuberance. Steeped in the complexities of tax laws and strategies, he was among the first to co-author a primer to help workers understand how options worked and how to take money off the table. Secrets of Tax Planning delves much deeper, providing detailed explanations that should serve as a helpful resource for tax pros, investment managers and financial planners – and undoubtedly a few do-it-yourself engineers."
Mark Schwanhausser
Personal finance reporter
San Jose Mercury News
San Jose, California
"Secrets of Tax Planning for Employee Stock Options, Stock Grants and ESOPs, 2nd Edition by Michael Gray is the most complete one-stop authoritative literature I have found available on stock compensation and planning. Replete with his numerous fact-based examples, Gray makes a complex subject and easy read, assuming any tax subject can be easily read! One distinct advantage is the IRS now requires a taxpayer’s position to be developed based on primary source materials (code, regulations and appropriate judicial pronouncements) – not merely an expert’s opinion. Gray is the expert, but he also provides all of the needed references to primary source materials so that another CPA or attorney developing strategy can rely on Gray’s road map to the answers in the primary source materials. I would not be without the book!"
Robert A. Petersen, CPA
Saratoga, California
www.caltaxcpa.com
"As a financial planning professional, I consider this book by Michael Gray, CPA an invaluable source on an extremely complicated topic that is critical to most of my high net worth clients in Silicon Valley. The text is surprisingly easy to read with complete topics presented in sequence for ease of future reference. There are many useful charts interspersed inn the text. This can easily be considered a ‘handy reference’ because it’s easy to find the topic you want. For the professional who is counseling clients on stock options, this reference will give you the confidence you will need to help the client make some really important decisions."
Craig Martin
Financial Consultant
The Family Wealth Consulting Group
San Jose, California
"My 30 years in the financial services industry has taught me that financial success for the entrepreneurial executive, employee and investor depends on proper planning. One important tool is tax planning for equity-based compensation. Michael Gray, in his book Secrets of Tax Planning for Employee Stock Options, Stock Grans and ESOPs is right on target. Successful clients and their advisors need to stay current with trencs and issues regarding equity performance-based compensation in designing, updating and implementing their financial plans to keep pace with tax and legal changes. Michael’s book is readable and functional for both the professional and the layman."
Dick Blakely
Managing Director
Concert Wealth Management, Inc.
San Jose, California
"I am so grateful that you have written this book. For years I have told my clients the importance of working with professionals in this area of taxation. It is complex and ever-changing and requires great technical skill and time.
"There is an old saying, ‘The more you know, the more you know you don’t know.’ I hope every lay person who thinks they understand the complexities of these issues reads this book. They should figure out how much time a specialist in this area spends to learn and stay current in the subject matter, what penalties are involved if they do them incorrectly, what they could have been doing with that time to advance their career, enjoy their family and friends and achieve their personal goals.
"Then they should identify the most skilled and knowledgeable experts in this area of taxation and hire them."
Liesa Fenton
Investment advisor
San Jose, California
Here’s what Michael Gray’s clients say
"To Whom It May Concern:
I first met Mike Gray in 1999 to ask his assistance with stock option tax issues. Little did I know back then that over the next few years, Mike would help me with a hairy tax documentation problem, help my wife and me set up our will, provide me with advice on starting my new company, and become our company tax advisor. Along the way, Mike has provided me with excellent legal contacts and even sales reference materials.
Adding it all up, you soon realize that Mike is much more than just a CPA – he is a very knowledgeable advisor and guide in all facets of our financial life. I’m very glad to count Mike Gray as one of my most trusted advisors.
Best Regards,
Dean
Dean Haritos
President
Cloudbreak Software, Inc.
"I contacted Michael Gray on April 12th of this year (2007) out of desperation. I had a somewhat complicated situation with stock options that were exercised in 2005 and flipped (ISO stock sold) in 2006, resulting in an early disposition of qualifying options. I had given my papers to a local CPA who gave me the news that I owed the IRS a large mortgage for the transaction with an overall tax rate of over 70% for the options. I then took my papers to a top notch national CPA firm who had their top tax researchers give me the same unbelievable news. An internet search turned up Michael’s firm as stock option experts, and after emailing documents to him, he called me with the news that I in fact was getting a refund because of the early disposition, and had my extensions prepared before the April 15th deadline. Advice, service and client relationship are unsurpassed. If you have ISOs that you are considering exercising, contact an expert such as Michael Gray before you choose to exercise them.
Thanks again,"
Bob Kalish
Albertson, New York
"Mike is a very astute tax professional. He has provided much guidance so that we can try and be as tax efficient as possible and keep as much of our hard earned dollars!"
--Suzanne and Scott Gardner
"I greatly appreciate Mike Gray & his office staff’s help!
--Suresh Rao
"There is something in Mike’s DNA that makes him special at accounting. His ease with handling minutae has enabled him to really save my butt!"
--John Mardinly
"Mr. Gray really knows his stock options and he is an expert with ‘AMT’ – Alternative Minimum Tax. Mr. Gray helped me receive a $94,988.00 credit towards my tax liability. The savings in penalty, interest and stress are worth much, much more. Thanks a $ million!"
-- John Simon
"I exercised some incentive stock options during 2005 and had a substantial alternative minimum tax. Early in 2006, my employer was acquired, resulting in a disqualified disposition of my ISO stock.
"My local accountant wasn’t familiar with handling something like ISO stock. A fellow employee at my company said you helped him with the same transaction, resulting in a big refund.
"Your firm prepared amended 2006 income tax returns, resulting in a recovery of most of the alternative minimum tax paid in 2005.
"The IRS selected the amended return for audit. I was impressed that the IRS agent said he researched the issue and found that Michael Gray, CPA was an expert on the subject of incentive stock options and alternative minimum tax, which the agent hadn’t dealt with before!
"You explained what happened to the agent and provided requested documentation. With a minimum of hassles, our amended return was accepted as filed. The entire examination to report process took just slightly over two months.
"I would recommend your firm to anyone who has incentive stock options."
Richard Gold
Carmel, New York