Baker Tax Blog

The tax rates and deduction amounts for the 2023 calendar year are listed below. Federal ordinary income tax rates Single taxpayers If taxable income is between: The tax is:                               0 – 11,000 10% of taxable income                  11,000 –...

Someone just emailed me the following question (paraphrased): "I have a private company client who has approved a new hire grant to their new CEO that includes early exercise. The total exercise price of the option grant is $180,000 and the CEO is planning to exercise...

Let me start with the bad news: I have been persuaded that future token contracts likely do not work. But let's back up. If your offshore entity[1] has not yet minted tokens but you want to get something into the hands of service providers, historically you have had...

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 last year that Peter Thiel has apparently accumulated $5B in his Roth IRA this seems to be increasingly on people's...

So, your company has generated some tokens (presumably offshore) and you want to use them to compensate employees. Common ways to do so include: Restricted Tokens Tokens can be sold or awarded to employees. Since the employee will generally either need to pay for the...

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...

I am frequently asked whether a new tax code Section 83(b) election is necessary when vested stock is subjected to new vesting restrictions. This revesting most often occurs at a financing. The investors request the revesting to ensure that the founders stick around....

You run a start-up and want to grant stock options. You keep hearing that there are two types, and you want to understand the differences between the two. You’ve come to the right place. The two types of stock options are incentive stock options, commonly referred to...

Those who hold qualified small business stock (QSBS) have dreams at night about selling their shares and receiving the proceeds tax free.[1] Lately, however, I’ve seen a number of stockholders wake up from that dream in a cold sweat. Why? The company is being sold and...

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...

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...

 Section 409A is a highly technical section of the tax code that slaps a 20% tax penalty onto improperly structured deferred compensation. But there is a hack. You can avoid the penalty by adding these 10 magic words to the contract… “, subject to [his/her] continuous...