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BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 933
Experience:  Owner of a CPA firm
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I have received stocks from my start up (Pre-revenue) technology

Customer Question

I have received stocks from my start up (Pre-revenue) technology development and commercialization Company as a form of compensation. The accrued compensation was collected for few years but the company wanted to reduce debt to attract investors so the board decided to offer me to convert my debt to stocks. Since from the company’s point of view I am getting paid I should report it as such and pay Federal and State taxes. From my point of view I still have no money received from the company. I just received extra ownership in the company as the form of compensation since the company could not pay. I don’t even know when the stocks will have actual market value so I could sell it and generate real income. I would like to know if there is any way to avoid paying several thousands of dollars as income taxes until I actually receive money from these stocks?
Submitted: 6 years ago.
Category: Tax
Expert:  BK-CPA replied 6 years ago.

The fair value of the stock is the problem as I see it. Bear with me:


By accepting the stock as payment for your wages, you're setting the price and fair value measurement. Do you really think this is worth it? It sounds to me like you're going to owe taxes and get otherwise jipped out of your money.


Get local professional help, please!!

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