Did you exercise (or are planning to exercise) an incentive stock option (“ISO”) during calendar year 2018?  Do you intend to sell the underlying stock within the 12-month period from the date you exercised the ISO?  If you answered yes to both of the foregoing questions, then as part of your tax planning, consider whether the underlying stock should be sold during calendar year 2018 in order to minimize your alternative minimum tax (“AMT”) exposure. Continue Reading ISOs: No Item of Adjustment for AMT Purposes if Exercise and Sell within Same Calendar Year

If an employer grants one of its employees a restricted stock award, should that employee make an 83(b) election at the time the restricted stock award is granted?  What is the upside to the employee if he or she makes an 83(b) election?  What are the risks to the employee?  The answers to those questions are this “Tip of the Week.” Continue Reading Tip of the Week: Pros and Cons of Making an 83(b) Election

We previously posted on grandfather treatment under the Tax Cuts and Jobs Act (the “Act”), as clarified by Notice 2018-68.  This post is an extension of our prior post and is intended to highlight that an issuer’s PFO is subject to a slightly different analysis with respect to Grandfather Treatment (defined below). Continue Reading Different Grandfather Analysis Applies to PFOs under Section 162(m) and Notice 2018-68

The purpose of this post is to highlight certain action items that a publicly-traded company should consider in order to help it preserve compensatory deductions.  The timing of this post is triggered by Notice 2018-68 that was issued by the IRS on August 21, 2018. Continue Reading Preserving the Deduction: Certain 162(m) Action Items Triggered by Notice 2018-68

Just a quick note.  Today the IRS issued guidance on Section 162(m) of the Internal Revenue Code of 1986 (“Section 162(m)”), as curtailed by the Tax Cuts and Jobs Act of 2017 (i.e., the Act essentially eliminated the performance-based exception to the $1mm deduction limit under Section 162(m), except with respect to certain grandfathered plans).  The IRS guidance comes in the form of Notice 2018-68.  Later this week we will provide our thoughts on design considerations that should be considered by publicly-traded corporations intent on maximizing the deductibility of their compensation.