Category Archives: Uncategorized

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”

The SEC has proposed amendments to Rule 147. The trouble is, the proposed rules would take away one of the federal law support beams for Washington State’s equity crowdfunding law. Our statute requires compliance with Section 3(a)(11) of the Securities Act of 1933, as amended, and Rule 147, and the SEC has proposed that Rule 147 no longerContinue reading “Washington State Crowdfunding Law in Jeopardy?”

The SEC has finalized the Title III crowdfunding rules. Now it is time to see how people will use the new rules. One thing that I think might have been overlooked in all of the excitement over the final rules is the possibility of doing a Title III equity crowdfunding at the same time asContinue reading “Title III, Rule 506 & Reg A”