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ISO Exercise Perform Steps ((. (gavel1 Capture Legal Department: Notify…
ISO Exercise Perform Steps
No payroll or tax withholdings :forbidden:
Legal Department: Processes Exercise Documentation
Legal Department: Notify Tax Department *
Legal Department: Notify Accounting Department for recording
exercise
and coding
cash receipt
Accounting department is notified for recording
exercise
and coding
cash receipt
.
Legal Department: Notify accounting department for recording transfer
Legal Department: Notify tax department
Legal Department: Notify payroll department of gain amount. This is calculated as sales proceeds less exercise price
No withholdings :forbidden:; Gains reported on W-2
Legal Department: process transfer documentation
This is a disqualifying disposition of ISO, so it is handled differently. Basically, because they sold before a year, they don't receive the same tax benefit as normal ISO
Sale of stock after 12 months
No tax or accounting implications of sale for the company
Legal Department processes transfer documentation
Notify accounting department for recording transfer
Sell
Tax Department is notified by legal for form 3921 reporting purposes
Sale of stock within 12 months
