Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

What are the individual tax consequences of lowering an exercise…

Customer Question
What are the individual tax...
What are the individual tax consequences of lowering an exercise price on a stock option plan? for example, our plan is currently 25 dollars and we want to lower it to 5 dollars. if a participant has not exercised, we plan to just let the old plan fade away or should we amend and restate the old plan or adopt a new plan and cancel the old paln??
Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 16 minutes by:
6/26/2015
Tax Professional: Tax.appeal.168, Tax Accountant replied 2 years ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,711
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified
Welcome. Thank you for choosing us to assist you. My name is ***** ***** my goal is to help make your life, a little... less taxing.
Q: What are the individual tax consequences of lowering an exercise price on a stock option plan?
A: There is no specific language indicating that the old plan should be revised or a new plan created, but based on the following information, that is what is sounds like needs to be done to keep the company out of hot water. In my opinion, it is best to create a new plan. Otherwise, not implementing a new plan to reflect the correct exercise price could be considered fraudulent and deemed as Plan Mismanagement. SEE BELOW:
Plan Mismanagement
Under federal law, the people responsible for overseeing a stock option plan must provide information about plan features and funding, provide a grievance and appeals process, and act in the best interests of the plan participants. Fraudulent information concerning an employee’s entitlement to options, number of assigned shares, exercise price, or vesting schedules is a violation of the act and a common source of litigation. Choose your plan administrators wisely.
REFERENCE SOURCE:
http://www.allbusiness.com/getting-started-with-an-employee-stock-option-plan-15329404-1.html
Let me know if I can be of further assistance to you regarding this matter.
Ask Your Own Tax Question
Tax Professional: Tax.appeal.168, Tax Accountant replied 2 years ago
Information relating to individuals:
A company may reprice its options, allowing employees to exchange underwater options for ones that are in the money. For example, if options were originally exercisable at $50, and the stock's market price dropped to $30, the company could cancel the first option grant and issue new options exercisable at the new $30 share price.
REFERENCE SOURCE:
http://money.cnn.com/pf/money-essentials-employee-stock-options/
Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,711
4,711 Satisfied Customers
Experience: 3+ decades of varied tax industry exp. Tax Biz owner

Tax.appeal.168 is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
Tax Question. Texas. It is a federal estimated tax question.
It is a federal estimated tax question. We have an unusually high income year due to withdrawal from our IRAs to pay off our mortgage. We know we have met the safe harbor requirements through a combination of taxes withheld from the withdrawals and withholding from our pensions using the 110% rule of last year's tax because our income is over $150,000. The questions are: 1. Can we skip the rest of the estimated tax payments through the rest of 2018? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
International tax law? Interpretation of FBAR and 8938
interpretation of FBAR and 8938 reporting exceptions? … read more
taxmanrog
taxmanrog
Master\u0027s Degree
968 satisfied customers
Tax law question. Are life insurance premiums on the owner
Tax law question. Are life insurance premiums on the owner of a small corporation deductible business expenses? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
A ROTH IRA can form a LLC based on federal law. I plan to
A ROTH IRA can form a LLC based on federal law. I plan to file in the State of NevadaCan I as the owner of the ROTH act as “Registered Agent”Can I as the owner of the ROTH serve as a Managing MemberCa… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Is there a Federal or Utah State law that requires non-
Hi! Is there a Federal or Utah State law that requires non- profit, 501(C)3 charities to return a donation if the donor asks (the money is not being used as per the donation)? … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
333 satisfied customers
Under Texas Law, Is the date of death used for value of
Under Texas Law, Is the date of death used for value of estate … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
333 satisfied customers
Individual on an o-1 visa with no US income or presence in a
individual on an o-1 visa with no US income or presence in a year, do they need to file a return?… read more
Tax.appeal.168
Tax.appeal.168
Tax Accountant
4,711 satisfied customers
Can interest & charity donations be used on 2018 tax return?
Can interest & charity donations be used on 2018 tax return? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I'm on Federal Disability, on my Federal Tax forms there are
I'm on Federal Disability, on my Federal Tax forms there are special provisions for this income. How do I handle it on my California State Income tax filling Married Joint? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I want to use TurboTax to compute federal income tax and
I want to use TurboTax to compute federal income tax and FICA tax for a hypothetical taxpayer for her 2018 tax year. Under the 2017 tax reform act, she won't have personal deductions and her standard … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,238 satisfied customers
Individual Tax Id USA I need an USA Individual Tax Id. I am
Individual Tax Id USA I need an USA Individual Tax Id. I am a European citizen on a ESTA visa in the USA. Could I still get an USA tax id? Applying using form W7 form?… read more
taxmanrog
taxmanrog
Master\u0027s Degree
968 satisfied customers
I used Turbo Tax to prepare my federal and state tax
I used Turbo Tax to prepare my federal and state tax returns. I specified to e-file both. I found out later that neither were filed. WHY? my printer doesn't work so can't print my returns. How do I ge… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,238 satisfied customers
BONE FIDE PUERTO RICO LAW. Military and I paid federal taxes
Military and I paid federal taxes but my home of record is puerto rico they also took state taxes … read more
Mark Anderson
Mark Anderson
Attorney
Doctoral Degree
10 satisfied customers
The new federal tax law doubles the amount of money that's
The new federal tax law doubles the amount of money that's automatically exempt from the federal estate tax -- to roughly $11 million of an estate for someone who was unmarried. The provision remains … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Section 962 election A US individual owns a foreign
Section 962 election A US individual owns a foreign corporation which generates GILTI income. Can the US individual make a section 962 election (to be taxed at corporate rates) and therefore pay only … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
My question is regarding US tax law for overseas property. I
Hello, My question is regarding US tax law for overseas property. I am a US citizen. My husband is a UK citizen. I have no legal status in the UK. He has no legal status in the US. We live in the UAE.… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Interested in information about new tax laws and their
Interested in information about new tax laws and their effect on S Corporations … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES ALIMONY PAYMENTS, WHAT CAN QUALIFY AS TO ***** REDUCE THE TAX ON THE ALIMONY RECEIVED ? CAN BUSINESS LOSES BE CARRIED OVER TO REDUCE THE TAX ON … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x