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If an officer of a public company purchases stock at a

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If an officer of...

If an officer of a public company purchases stock at a bargain price in May, but later in August s bound by a lock-up agreement and prohibited from selling the stock, is the purchase of the stock taxable. For example, the Officer buys 100,000 shares at $1.00 in May and pays $100,000, but the stock is valued and trading on the date of purchase equal to $4.00/share or $400,000. In August, the Officer is asked and signs an agreement that restricts the stock. In May, the stock was not considered restricted at the time of issuance. At the time of purchase there was a $300,000 difference between the bargain price and the market price. Is it true that if restricted on the date of issuance, it would not be taxable? If it happened in the same year, will the event be taxable, or does the subsequent restriction cause it to be non-taxable. What happens in the future?

Submitted: 11 months ago.Category: Tax
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Customer reply replied 11 months ago
It this being reviewed? I paid. Seems to have been lost
Answered in 1 day by:
9/14/2017
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 11 months ago
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,123
Experience: 35 years tax experience, including four years at a Big 4 firm.
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Hi from Just Answer. I'm PDtax, a US CPA, and can research the issue and advise.

Let's confirm this is a US tax issue for a US citizen. Then I can help, and will send you an offer for the research time.

PDtax

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Customer reply replied 11 months ago
It is for a U.S. Corporation for a U.S. Taxpayer (Citizen). Pre-Paid
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 11 months ago

See my offer for the research time.

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