Compensatory Stock Options, RSUs, ESPP, 83b and 83i Elections
Author: Jane Ryder
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
This course discusses different tax treatment between ISO and NSO stock options, LLC equity benefits, RSUs-Restricted Stock Units, RSAs-Restricted Stock Awards, and ESPP-Employee Stock Purchase Plans. Gain confidence in determining if stock options are ISOs or NSOs and which tax treatment applies. Understand and advise clients on 83b Elections for restricted stock and restricted LLC equity benefits plus the new 83i Election. Tax planning for clients for timing exercise, sale, and AMT issues for benefits.
Publication Date: October 2025
Topics Covered
- Compensatory Stock Benefits
- Stock Received in Exchange for Services
- What is an "Option"?
- Employee & Executive Stock Options
- Stock Options Pros & Cons Companies Issuing Stock Options Benefit Several Ways
- Statutory Stock Options (Employees Only)
- Tax Treatment of Statutory Stock Options (ISO's & ESPP)
- Incentive Stock Options (ISOs) §422
- Employee Stock Purchase Plans (ESPP) §423
- Non-Statutory Stock Options
- Restricted Stock Units (RSUS)
- Restricted Stock Awards (RSAS)
- Section 83(b) Election (Rev. Proc. 2012-29)
- New TCJA Section 83(i) Election to Defer Tax on Stock Options & RSUs
- Stock Received in Exchange for Services
- Other Restrictions on Grants
- Compensatory Stock Benefits Reporting Challenges
- Strategies for Maximizing Stock Benefits
Learning Objectives
- List the various employee stock benefits and their tax treatment
- Determine which stock options are ISOs or NSOs and what factors affect this determination
- Identify 83b and 83i elections, tax treatment and pros & cons
- Identify tax planning and other strategies to maximize benefits for clients
- Identify the usual vesting period for employee stock options
- Identify when ordinary income is recognized for Restricted Stock Units (RSUs)
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
