Baker Tax Blog

Updated. Originally posted May 13, 2022  Can I Use a Self-Directed Roth IRA to Fund My Start-Up? I was asked this question by three different clients yesterday. Ever since it was revealed that Peter Thiel reportedly accumulated billions of dollars inside his Roth IRA,...

May 2026 Update On May 20, 2026, Treasury Assistant Secretary for Tax Policy Kenneth Kies said during a conference in Washington, D.C., that the IRS is preparing guidance on the expanded exemption aimed at curbing what he described as stacking abuse. “Let me just warn...

So, you accidentally granted one or more discount stock options. Now what? As quick background, a discount stock option has an exercise price below the fair market value of the underlying stock on the date of grant.[1] For whatever reason, Congress doesn’t like this...

A “double merger” is exactly what it sounds like: two mergers completed back-to-back as part of a single, integrated transaction. In the first step, the buyer acquires the target through a reverse triangular merger, with the target surviving as a wholly owned...

So, you own equity in an LLC taxed as a partnership, and it has come time to sell the company. What happens if you sell your interest? What happens if instead the LLC sells its assets? Similarities Regardless of whether the transaction is structured as an equity sale...

Let’s say it’s February 2026 and you have some stock options you would like to grant members of your team.  You’ve heard that you can rely on a tax code Section 409A valuation for up to 12 months.  You received a valuation of $0.30 per share effective as of December...

Myth: You must grant stock options with a fair market value exercise price. Truth: A nonstatutory stock option can be granted with a discount exercise price if: The stock option is fixed-exercise; or The stock option meets the independent contractor exception. Most...

Occasionally a company calls me and asks me about granting a stock award to a service provider in a foreign country.  That can be done, though it often involves drafting an international form of stock award agreement, sometimes involves adopting a sub-plan to be...

It's 1099 season. For those of you who paid a law firm for legal services this year, here are three tips: 1. Payment for legal services goes in box 1 of Form 1099-NEC. Do not use Form 1099-MISC. Form 1099-MISC box 10 "Gross proceeds paid to any attorney" is for when...

Updated. Originally posted September 14, 2019. Once there was a beautiful tech incubator named Y Combinator. In a dream one night she saw herself curing every start-up’s funding woes with a magical new creature called a SAFE. When she woke up, she got to work creating...

“You filed your Section 83(b) election, right?” Silence. “Right?” I gave a presentation years ago on how to fix a missed tax code Section 83(b) election. My phone started ringing the moment I returned to my office. Turns out, these get missed. Apparently, founders...

I occasionally get asked whether it is possible to transfer a stock option. Listed below are relevant considerations.  Does the plan allow for it?  Carefully read the stock option plan and agreement to see if there are any restrictions on option transfer. There...