Product Description
As Mark Schwanhausser of the San Jose Mercury News has written with respect to the two previous editions, “Stock Options” is “…a mainstay reference for tax pros…”
STOCK OPTIONS: An Authoritative Guide to Incentive and Nonqualified Stock Options
3 Aug
6:37 am on August 3rd, 2010
I bought this book as a gift for my CPA. He liked it so much that he told his colleagues about it and they bought it too. I saw it listed as “recommended reading” by Cal CPA Online, posted at the California Society of CPAs. I later found that it’s used as the basis for continuing education courses for CPAs.
The material is supported by countless references to the Internal Revenue Code, IRS Regulations, IRS private letter rulings, IRS Revenue Rulings. My CPA tells me that if ever audited by the IRS, you quote this book – giving the section of the tax law or other basis for why you prepared your tax return the way you did. It’s the ultimate protection for option holders because an IRS agent can’t dispute what CPAs call legal “cites” or legal “authority”. I’ve learned from CPAs that it’s an important reason why the book is so popular with tax attorneys and CPAs — it reduces the amount of time they need to spend on tax research at $175+ per hour (because the book has done the work for them) and that makes it less costly for their clients.
IPOs. If you have options on a company that’s about to make an IPO, this book shows you how to exercise UNVESTED options if your company’s stock option plan allows it. Exercise unvested options and make a section 83(b) election (and how to make the election) if you expect substantial appreciation in the stock — you end up with less ordinary income and MORE long-term capital gain.
I counted more than 30 examples in the book on just about any income tax question – reload options, using stock already owned to exercise options without having to pay tax, how to compare option packages offered by different employers, how to save taxes by converting ordinary income into capital gain, what makes a disposition of stock disqualifying and what does not and why it matters, how to compute the amount of income subject to tax on an ISO, that the basis in your stock is often different for regular tax purposes and alternative minimum tax and how to report this difference on your tax return in order to avoid the overpayment of AMT, several charts that accompany some of the examples on ISOs, what the AMT credit means and how it arises and that it can be used in future years to reduce the regular income tax, how to decide if it makes sense to exercise ISOs and hold the stock or to make a same-day sale, when it makes sense to buy the stock outright instead of exercising an option well before its date of expiration, how to report option transactions on IRS Form 1040.
Rating: 5 / 5
8:50 am on August 3rd, 2010
I’ve read every news paper article, taken several educational classes, and devoured water cooler gossip on how best to take advantage of stock options. This book sets the record straight on how to save your precious option $$ from tax erosion. It’s tough reading, best done with pencil, paper, and calculator in hand, but worth every penny you spent!
Rating: 5 / 5
8:55 am on August 3rd, 2010
I was preparing a client’s return who had an ISO preference. His (former) employer is an NYSE listed firm. (Large HR and tax departments) I opened Mr. Pastore’s book to check the calculation of this preference. In less than a minute, I determined that my client’s W-2 was wrong (by over $150,000). Turned out that lots of other employees’ W-2s at this company were also incorrect.
This book saved my client a bundle, and made me a hero.
This is the best $40 you’ll ever spend if you have one client with employee stock options
Rating: 5 / 5
9:54 am on August 3rd, 2010
I have a friend of mine, who was granted some stock options from his company. He was totally lost as to the consequences of the granting of the options. I did some research on the subject and my research pointed me into the direction of this book.
Both my friend and myself, were very impressed with the illustrations and ease of reading. Mr. Pastore gave several highly informative illustrations that were well thought out and easily explained.
I would recommend this book without reservation.
Rating: 5 / 5
12:48 pm on August 3rd, 2010
The book is a helpful starting point for people totally unfamiliar with employee stock options. However, it does not give any innovative strategies for handling the options. It is simply a good source of basic information. Not written for professionals but may be useful for the beginner. (Although it is not bad for a self-published work.)
Rating: 2 / 5