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The key point is that stock must be issued for at least the par value per share stated in the corporate formation documents. That will be one controlling factor. The other is that previously issued stock does not get revalued on the books. It would, if done, create phantom income/loss situations. That said, if the stock has a $1 per share par value the 600 shares must be valued at $600. This can either be paid to the corporation by the employees or it will need to be recorded as income to them. The employees will be taxed on their W-2 forms for Social Security and Medicare taxes. No other taxes need be involved.
Since you cannot coerce the employees into acquiring the stock you have a stock option situation. Here is a piece from the IRS about that with links to other helpful material. The price of the stock is always booked at par value. Any amount above that is recorded as additional paid in capital.
Topic 427 - Stock Options
If you receive an option to buy stock, you may have income when you receive the option, when you exercise the option, or when you dispose of the option or stock received when you exercise the option. There are two types of stock options: statutory stock options and nonstatutory stock options. Generally, options granted under an employee stock purchase plan or an incentive stock option (ISO) plan are considered statutory stock options. Nonstatutory stock options are not granted under an employee stock purchase plan or an ISO plan. Refer to Publication 525, Taxable and Nontaxable Income, for assistance in determining whether you have been granted a statutory or nonstatutory stock option.
If you are granted a statutory stock option you generally do not include any amount in your gross income when you are granted or exercise an option. However, you may be subject to Alternative Minimum Tax in the year you exercise an ISO. For more information, refer to the Form 6251 Instructions. You have taxable income or deductible loss when you sell the stock you received by exercising the option. You generally treat this amount as a capital gain or loss. However, if you do not meet special holding period requirements, you will have to treat income from the sale as ordinary income. Refer to Publication 525 for specific details on the type of stock option rules, for when income is reported and how income is reported for income tax purposes.
If you are granted a nonstatutory stock option, the amount of income to include and the time to include it depends on whether the fair market value of the option can be readily determined. If an option is actively traded on an established market, the fair market value of the option can be readily determined. Refer to Publication 525 for other circumstances under which the fair market value of an option can be readily determined and the rules for when income is reported for an option with a readily determinable fair market value. Most nonstatutory options do not have a readily determinable fair market value. For nonstatutory options without a readily determinable fair market value, there is no taxable event when the option is granted but the fair market value of the stock received on exercise, less the amount paid, is included in income when the option is exercised. You have taxable income or deductible loss when you sell the stock you received by exercising the option. You generally treat this amount as a capital gain or loss. For specific information and reporting requirements, refer to Publication 525, Taxable and Nontaxable Income.
Let me see if I understand the responses as they apply to the company and the employee.
1. The company records a sale of stock of $600.00 - par value for 600 shares
2. The employees now have the stock, and will receive distributions of shareholder withdrawals on the active stock as long as they are with the company and don't leave and sell the stock.
3. The employees report income of the FMV of the stock and pay taxes on that amount. They also pay the $600.00 to the company for the stock, so that amount should be reduced from the FMV.
4. I still don't understand how any of this relates to options.
4.The employees have the option to acquire the stock. If they do the difference between the par value and fair market value is income to them immediately. They report this on their tax returns as income in the year they exercise the option. At a later date, when they dispose of the stock this (par value + excess of value over par) serves as basis in determining their gain/loss.