Holding period
This term is used for several purposes. First, it describes the time you must hold your stock options before they vest. For this, the holding period typically begins on your...
Read More Insights
We write about employee stock options, equity compensation, and financial planning in a way that is easy to understand.
In-kind donations
When donating the value of shares you own in company stock, you can sell the shares and donate the cash. Or you can transfer the shares “in-kind,” without selling them....
Read More Incentive stock options (ISOs)
Among available stock options, ISOs are often the most tax-advantaged, but potentially complicated options to manage, especially since they entail planning for alternative minimum tax (AMT) and AMT credit, and...
Read More Initial Public Offering (IPO)
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,...
Read More Low basis/high basis stock
See high basis/low basis stock.
Read More Lookback Provision
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.
Read More Net/gross value
See gross/net value.
Read More Net exercise
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...
Read More Net Investment Income Tax
An additional tax of 3.8% levied on realized capital gains for high-income earners.
Read More Net Unrealized Appreciation
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...
Read More Non-qualified stock options (NQSOs)
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...
Read More Offering Period
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...
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