Author Archives: joewallin@outlook.com

If you want to comment on the SEC’s proposed amendments to Rule 147, the deadline is Monday. Rule 147: What Has The SEC Proposed In general, what the SEC has proposed are good improvements to the law. For example: a company using the newly proposed Rule 147 would not have to be incorporated in theContinue reading “Rule 147: Comments to SEC Due Monday”

The SEC staff has issued its first report on the definition of the term “accredited investor.” Dodd-Frank requires the SEC to review and report on the definition of “accredited investor” every four years: to determine whether the definition should be modified or adjusted for the protection of investors, in the public interest, and in lightContinue reading “Accredited Investor: Your Chance to Comment”

Now that the qualified small business stock 100% tax exclusion is going to be permanent, one question that will come up more often is: Qualified Small Business Stock Options Do optionees qualify? Meaning, do holders of compensatory stock options, who exercise those options and acquire stock–can they qualify for the Section 1202 qualified small business stockContinue reading “Qualified Small Business Stock Options”

In the big tax bill the Congress just passed, Congress made the 100% exclusion for gain on qualified small business stock held for more than five years permanent. You can find the text of the bill at Congress.gov. Qualified Small Business Stock You might remember that the Congress has extended the 100% exclusion several times, butContinue reading “Qualified Small Business Stock: 100% Exclusion To Become Permanent”

You might be wondering about the status of the 100% tax exclusion for qualified small business stock acquired during certain periods and held for more than five years. Late last year, the Congress extended the 100% tax exclusion for qualified small business stock acquired: 1) after the date of the enactment of the Creating Small BusinessContinue reading “Qualified Small Business Stock: 100% Exclusion”

Deferred salary or deferring salaries is an alluring trap in startup land. A company’s runway gets shorter. The company wants to extend its runway. It can be tempting for the founders to start “deferring” salary. Maybe some non-founder employees start deferring salary too. Deferred Salary: The problems? What are the problems with simply deferring salary? Under SectionContinue reading “Deferred Salary: A Trap”

If your company has had employees exercise incentive stock options (“ISOs”), you are required to report certain information to the IRS and the optionee about the exercise. ISO Tax Reporting There is no income or employment tax withholding required on the exercise of an ISO. But there is an annual tax reporting obligation to theContinue reading “ISOs: Annual Tax Reporting Requirement”

The RAISE Act would allow holders of stock in private companies to more easily sell their shares. Sales of private company stock are known as “secondary transactions.” Secondary transactions are currently hard to do because of the securities law restrictions on sales of shares in private companies, and also because companies frequently impose a number ofContinue reading “The RAISE Act: Good News for Tech Workers”

A lot of companies, including a large portion of Silicon Valley startups, grant new hires immediately exercisable ISOs (incentive stock options) with the expectation that many will exercise their options “early” for favorable tax treatment. In fact, employees are often given a kit with all the paperwork, including everything needed to exercise and file anContinue reading “Immediately Exercisable ISOs: The Problems”

I overreacted a bit in my last blog post when I said that Washington State’s crowdfunding law might be statutorily “broken” if the SEC’s proposed rules on Rule 147 were adopted. If you are not familiar with how the securities laws in this area are written, Rule 147 is the rule that interprets Section 3(a)(11) of the Securities Act.Continue reading “State Crowdfunding: The SEC’s Proposed Rules”