Stock options, how do they reduce a companies pre-tax income?
400085
A stock option is an offer or promise by a company to another party to sell to the other party company stock at a price at or below street value. If the offer is made at a price that is below street value, the company can expect to loose money on the transaction whenever the sale occurs. This for accounting purposes is recorded as a loss to the company, and losses reduce the income of the company - and the loss/reduced income is recorded before the corporate taxes are paid, so the loss is pre-tax.\n\nYou accountants out there feel free to blow me out of the water, if I'm not right, but this is the way my accountant buddy explained it to me.
855907
They cannot charge you 30% when your shares are STT paid.  It is only 10% flat.  It comes U/s 111A.  \n\nEven I have filed the returns for F.Y 2005-06 with the same income and paid only 10% flat. (5 assessments for my family with same income u/s 111A.)\n\nFor your information I am giving you a web link.  Also google your question - income tax 111A short term capital gains - You will find number of answers.\n\nhttp://sify.com/finance/tax/fullstory.php?id=13570054
875181
Buying stock does not effect taxes at all.  Selling stock creates a capital gain or loss that is taxed/deductible.  If the stocks pay dividends, they are taxable income.  If the stocks are held in an IRA, 401(k), or other tax deferred plan, taxes are only paid when you take the money out of the plan.
1044755
The optimal way to distribute earnings from a TX corporation is to pay yourself a salary.  With proper planning during December (or whatever month is your year end), your CPA can estimate your net income from the corporation and then determine if you need to pay yourself a bonus to lower the corporate earnings in order to reduce franchise taxes.  \n\nWith an LLC you won't have this option, and LLCs are subject to TX franchise tax.  :) PrissyPanda, CPA  Dallas
378795
not if you are looking at as a "deduction"\nit's a flat rate up to a ceiling, based on taxable gross income. best way to reduce it is, pretax deductions (401, pretax med insurance, fsa, etc)
709679
The only way to reduce the taxes on the gain on real estate is to do a "Section 1031 Exchange".  The only problem is that you do not receive cash.  You received another piece of real estate.\n\nThere is not a way to reduce taxes on the sale of stocks at a gain.
1187130
To my knowledge, they can't.  Stock options have nothing to do with inflating earnings.  If anything, they deflate the earnings statement b/c they now have to be expensed at issue (a provision of SOX).  If executives omit the options expense on the earnings report I think they're comitting faud.
1135739
they will factor the fall into the spread.  They don't allow arbitage opportunities like this.  I thought I can buy a put on a prediviend payout stock that has a large dividend but that doesn't work either.  If you do short-sell a stock, you have to deduct the dividend and pay it to the owner of the stock that allowed you to borrow his stock for short-selling.
754902
call your bank.  They will most likely be able to sell your stock for you.
656821
Only when sold at a profit.  If you sell at a loss you don't owe any tax on the transaction, and it might reduce your overall taxable income.  It's exponentially more complicated than that because gains and losses are treated differently based on holding period, the different kinds of gains and losses offset each other, some overall losses can reduce taxable income, and if you have too much loss you carry it forward into future years.  Congress ensured millions of dollars will go to tax accountants with that one provision, which is actually a comparatively simple slice of the monstrous tax code.
458985
The recording of the option income is required by the employer whether a disqualified disposition for incentive stock options or exercise of nonqualified stock options.  \n\nHowever, the gain (or loss) of the stock sales would require you to put the price and date you bought the stock along with the date and amount you sold the stock.\n\nAt the end of the year, the option income will be reflected on a W-2 form (originally options offered when you were an employee) whereas you will be required to post the gain/loss amount on your income tax return for the sale of stock.
627801
No, you can't avoid capital gains tax. Unless it is in an IRA if you sell it you pay taxes. That may not be that bad. If it is a long term gain bite the bullet and pay the 15%. The 15% maximum capital gains tax is a big windfall to someone in your situation. No one likes to pay taxes but in your case it is pay me a little now or a lot later.\n\nIf it isn't a long term gain yet then certainly wait until it is.
171313
1) Employee Buyout\n2) Sell to another entity (company or person)\n3) Sell stock publicly (ipo)\n4) Sell off / license assets of the company
418
Stock option grants and stock grants are two forms of compensation often offered as incentives in addition to base salary offered to a newly hired employee. This practice is especially common in the high tech industry. \n\nStock options are contracts that allow you to buy or sell specific amount of a particular stock at a certain price within a set period of time. The set price is called the strike price. When you (the stock option holder) make use of your right to buy/sell stock according to the terms of the option, you are exercising the option. Call options are options giving you the right to buy stock. Put options are options giving you the right to sell stock. Employers grant call options to employees. Let's take an example: Let's say you are hired by Google and they offer you options to buy 100 shares of Google stock at $400 within the next 5 years. This stock option gives you the right to buy 100 shares of Google stock at exactly $400 any time within the next 5 years. Let's say it's after four years now. Suppose Google stock is at $300 now, now your options are worthless, because you could buy Google stock in the market for $300, much less than the $400 price offered by your stock option. Now suppose Google stock is at $500 now, then if you exercise your option, you could buy 100 shares at $400. Then you can turn around and sell it on the stock market for the current price of $500, making a $100*100=$10000 profit. So the stock option is basically not worth anything if currently the stock price is lower than your option strike price. But as long as your option has not expired, it's possible that the stock price could go above your strike price and make your stock options worth something.\n\nStock grants are simpler to understand. The employer gives you some shares of stock for free. So let's use the Google example again. Suppose Google hired you and gave you 100 shares in a stock grant. Now you own 100 shares of Google stock. At anytime, you could sell that stock for whatever price it is trading at on the stock market.\n\nStock option and stock grants are usually offered on terms called vesting. That means that you are not given the full amount of options or stock right away, but rather the employer gives it to you over time. A common vesting schedule is vesting over four years, so that you get 1/4 of the stock or options offered after the first, second, third, and fourth year you have been at the company. This is done to give employees an incentive to stay at the company.
881018
Contact a Mutual Fund, such as T.Rowe Price or Scudder or a number of others who will act as administrator for your plan for clarification of your needs. \n\nThe basic 401(k) plan simply allows employees to make pre-tax contributions up to a certain level, with no company contributions.
132038
First, I would suggest ordering the FAS 133 book from the FASB website.  While it will put you to sleep, it has hundreds of examples.  \n\nWarrants are basically stock options attached to a financial instrument as a 'kicker' in financing to provide the potential for higher returns for investors.
338784
Besides the obvious of having more expenses than revenue you can try a sub-s corp.  A sub-s will allow you to pay yourself a salary and benefits.  You do get taxed on the profits as a pass-through.  This also would allow you to setup SEP-IRA or other pension benefits and the corp would contribute.