Glossary Archive - Page 3 of 14

Publicly Traded Stock

by Daniel Zajac, CFP®, EA | September 2, 2022 | P

After your company has completed its initial public offering, its stock becomes publicly traded. You (and others) can buy and/or sell your company stock and track its current fair market...

Pre-IPO

by Daniel Zajac, CFP®, EA | September 2, 2022 | P

Before your company has “gone public” by completing its initial public offering, any stock shares or stock options you may hold cannot be readily bought or sold—except potentially internally, or...

Ordinary income

by Daniel Zajac, CFP®, EA | September 2, 2022 | O

Broadly speaking, there are two main ranges of rates at which you pay personal income taxes (not including separate AMT calculations). Capital gains are taxed under one set of rates....

Offering Period

by Daniel Zajac, CFP®, EA | September 2, 2022 | O

Up to 27 months long for a qualified ESPP, the duration of time an employee can participate in a ESPP. A single offering period may include more than one purchase...

Non-qualified stock options (NQSOs)

by Daniel Zajac, CFP®, EA | September 2, 2022 | N

Among various stock options available, NQSOs are relatively easy to understand, with more latitude to control the taxable impact, as compared to restricted stock units, by choosing when to exercise...

Net Unrealized Appreciation

by Daniel Zajac, CFP®, EA | September 2, 2022 | N

A tax strategy that allows you to transfer shares of company stock inside a 401(k) plan in-kind into a brokerage account. The cost basis of the stock is included as...

Net Investment Income Tax

by Daniel Zajac, CFP®, EA | September 2, 2022 | N

An additional tax of 3.8% levied on realized capital gains for high-income earners.

Net exercise

by Daniel Zajac, CFP®, EA | September 2, 2022 | N

An option exercise in which a certain number of shares are withheld to cover the cost of taxes and/or the purchase price. The result is owning less shares post-exercise than...

Net/gross value

by Daniel Zajac, CFP®, EA | September 2, 2022 | N

See gross/net value.

Lookback Provision

by Daniel Zajac, CFP®, EA | September 2, 2022 | L

A lookback provision allows the employee participant of employee stock purchase plan to purchase shares of stock at the better of the purchase date price or offering date price.

Low basis/high basis stock

by Daniel Zajac, CFP®, EA | September 2, 2022 | L

See high basis/low basis stock.

Initial Public Offering (IPO)

by Daniel Zajac, CFP®, EA | September 2, 2022 | I

When a company completes its initial public offering, it transitions from being a privately held firm, typically owned by one person or a few individuals, to being a public company,...