Capital? Ordinary? A Little of Both? Navigating the Bewildering World of Stock Options


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This program was recorded live on Tuesday, September 20, 2022

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Continuing Education

CPE Program Knowledge Level: Overview
2 CPE Credit; NO prerequisites or advance preparation
CTEC Course #: 3022-CE-0154
IRS/RPO Approved Program
#7ZBUJ-T-00098-22-O (Online/Group) Live (Group-Internet Based)
#7ZBUJ-T-00098-22-S (QAS Self Study) Archive
Federal Tax Law (2 Hours)

Program Content

This online learning program, presented as a live webcast, will be also archived for QAS Self Study.  The program will be available for viewing for 12 months after the live webcast. A panel of IRS and industry experts will present the content during a live, interactive discussion, where participant questions can be submitted. Questions will be answered live on the program or posted on the Resources page.

The program, through a lively round-table discussion and real time interaction with the audience, examines the tax treatment of both employer and market stock options. The program will focus primarily on employer stock options, including both non-statutory and incentive options. Panelists also will examine Employee Stock Purchase Plans and how they differ from stock options. The panel will also explore market options, including puts, calls, staddles, hedges, and Section 1256 contracts.

By the end of the program, participants will have a practical understanding, through accurate, current, and effectively designed communications, of the tax treatment of stock options, including employer options and market options.

Program Learning Objectives

  1. Identify the schedule used to report gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit.
  2. Identify the form that lets the IRS know that certain individuals/entities received compensation.
  3. Identify the type of schedule that is preset and dictates when employees can take advantage of their stock options.
  4. Identify the notice sent to a taxpayer by the IRS system when the information on the taxpayer's tax return doesn't match the income and payment information the IRS has on file.

Program Outline

  • Non-statutory Employer Stock Options
    • Restricted Stock Units (RSU)
    • Options With Readily Ascertainable Fair Market Value
    • Options Without Readily Ascertainable Fair Market Value
    • Sale of Acquired Stock
    • Employer Deductions
    • Reporting Requirements

  • Incentive Stock Options
    • Requirements
    • Grant and Exercise of Option
    • Sale of Acquired Sock
    • Basis of Option
    • Dollar Limitation

  • Employee Stock Purchase Plan
    • Requirements
    • Grant and Exercise of Option
    • Sale of Acquired Stock

  • Market Options
    • Holder of Puts and Calls
    • Writer of Puts and Calls
    • Section 1256 Contracts

Panelists

Moderator

Alan Pinck, EA
A. Pinck & Associates

Alan Pinck is an Enrolled Agent with over 30 years of tax preparation experience in the San Francisco Bay Area. He has built a practice specializing in individual, small business tax preparation and audit representation. You have seen Alan presenting at NTPI events, CSEA Super Seminar, Spidell Publishing as well as a variety of other presentations for tax groups and small business associations. Having represented thousands of tax returns in audit, Alan has obtained tremendous insight of the audit process as well as knowledge on a wide variety of tax issues.

IRS Panelists

Reginald Wilson

Reginald Wilson

Reginald Wilson is Supervisory Tax Specialist in the Small Business Self-Employed Examination division of the IRS. He has 34 years of experience with the IRS including responding to tax-related questions, tax collection and currently examinations. In his current role, he serves as supervisor of Tax Compliance Officers in three Post of Duties that conduct in-office 1040 tax examinations ranging from 1040 Schedule A, C, D, E and F.

He is a member of the IRS Frontline Functional Management Training Cadre teaching leadership and management skills to newly hired Revenue Agent and TCO managers. He has taught multiple tax related courses internally including CPE courses for the Small Business/Self Employed division, Gulf States and Central Areas. Reginald received his B.S. from Lane College and his M.B.A in Public Administration from the University of Phoenix.

Industry Panelists

Lawrence Pon

Lawrence Pon, CPA, PFS, CFP, EA, USTCP, AEP

Mr. Pon is a Certified Public Accountant, Personal Financial Specialist, Certified Financial Planner, Enrolled Agent, United States Tax Court Practitioner, and Accredited Estate Planner in Redwood Shores, CA.

Mr. Pon has been in practice since 1986 and enjoys helping his clients reach their financial goals. He frequently speaks on tax and financial planning topics to tax professionals, financial advisors, and the general public nationally.

Mr. Pon is a long-time member of NAEA and CSEA.

Mr. Pon received his BS in Business Administration with emphases in Accounting and Finance from the University of California, Berkeley and MS in Taxation from Golden Gate University in San Francisco.

Stan Pollack

Stan Pollack, CPA

Stan Pollock received his bachelor's degree in Business Administration from California State University, Northridge in 1980. After working for large international accounting firms, he now runs a full service accounting and tax practice with offices in Oakland and San Francisco, California that focuses on high net worth individuals and small businesses, providing quality personalized financial and tax guidance.

In addition to the practice, Stan travels around the country teaching professional continuing education courses in accounting and taxation on a regular basis. He has been a regular guest on a local radio talk show discussing taxes, been quoted in several papers, and has previously taught accounting courses at junior colleges in Southern California.

Content Consultant

David F. Windish, J.D., LL.M
Content Consultant

David F. Windish, J.D., LL.M. in taxation, is a tax attorney and consultant. He has served as an instructor of tax-advantaged investments at the New York Institute of Finance; an Instructor of business law at the U.S. Merchant Marine Academy, Kings Point, N.Y.; and an adjunct professor at George Mason University, Fairfax, Va. He has also served as executive editor for Tax Analysts; managing editor for Business Strategies, published by CCH; and senior editor for the Institute for Business Planning.

Mr. Windish is the author of Practical Guide to Real Estate Taxation, published by CCH and currently going into its sixth edition. Earlier works include Tax Advantaged Investments and Investor's Guide to Limited Partnerships, both published by the New York Institute of Finance. Through the Center for Video Education, he authored continuing education courses dealing with real estate and closely held corporations. Those courses included readings, case studies, and videotape segments.

Mr. Windish is a graduate of Rutgers University Law School and the New York University School of Law, Graduate Division. He has been heard as a guest speaker at professional meetings and seminars and on popular radio programs.

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