[GNC] Company plan for stocks and stock options

[Brad Morrison]

Hi Wolfgang/all,

While I definitely echo what John has mentioned about having a tax 
professional that has experience preparing tax returns with stock 
options review the situation and your accounting setup, I will also note 
how helpful it is when a tax client is actually interested enough in how 
the relevant accounting rules works to assemble the necessary 
information correctly. The difference between working on a tax return 
for a "shoebox client" and a client that is organized is the frequently 
the difference between a good workday and a bad one...

Wolfgang: did your company provide you with a form 3922 or form 3921 for 
your stock options? https://www.irs.gov/forms-pubs/about-form-3922 & 
https://www.irs.gov/forms-pubs/about-form-3921

Another thing to think about is whether those stock options that are 
vested & distributed annually show up as compensation on your W2 - 
https://www.irs.gov/forms-pubs/about-form-w-2

Brad

On 4/4/23 12:26, john wrote:
> The whole bucket of deferred compensation is really complicated and how you account for it is tied up in tax law. If the value of the options, stock plan, retirement plan subsidies, and whatever else is large enough to matter to your tax returns you really, really need the help of a licensed accountant with direct experience with the types of deferred compensation you get. Ask your colleagues for recommendations.
>
> Regards,
> John Ralls
>
>
>> On Apr 4, 2023, at 11:14 AM, Murugan Muruganandam<m.muruganandam at hotmail.com>  wrote:
>>
>> Employee stock options are normally not taxed until the vesting is done.  Restricted Stock Units (RSU) has a different mechanism though
>>
>> What is your objective of this accounting? if you can detail then there are couple of ways to account for the same
>>
>>
>>
>>
>> Saludos Cordiales
>>
>>
>> Murugan
>>
>> ________________________________
>> From: gnucash-user<gnucash-user-bounces+m.muruganandam=hotmail.com at gnucash.org>  on behalf of Stan Brown<the_stan_brown at fastmail.fm>
>> Sent: Tuesday, April 4, 2023 2:06 PM
>> To:gnucash-user at gnucash.org  <gnucash-user at gnucash.org>
>> Subject: Re: [GNC] Company plan for stocks and stock options
>>
>>
>> On 2023-04-04 10:40, Wolfgang Paul Rauchholz wrote:
>>> Fairly new to gnucash and not a finance export, I want to run all my
>>> personal finances with this great tool.
>>>
>>> I installed 5.0 by compiling it under fedora core 37.
>>>
>>> I started adding normal daily expenses and all look fine.
>>>
>>> One of the doubts I have is how do I correctly add a company plan for stock
>>> options and stock plan that get vested/distributed every year. As I don't
>>> buy them there is no cash leaving my bank account.
>> The options and stocks are part of your compensation as an employee,
>> right? As such, the accounting would be similar to your accounting for
>> your paycheck.
>>
>> Your paycheck (ignoring tax withholding) is
>>     Debit: Cash or Bank account
>>     Credit: Employee income
>>
>> The stocks would be
>>     Debit: Stock in Company X
>>     Credit: Employee income
>> and similarly for the options. With stocks and options you'll want to
>> know number of shares and share prices so that you can compute gains and
>> losses when you sell them. If they aren't fully vested you will want to
>> note the vesting date as well.
>>
>> You'll probably want to have separate accounts for stocks in the company
>> and stock options. To simplify computing your income tax, you may want
>> to have separate income accounts for income in money and income in
>> securities; they could both be subaccounts under an Employee Income account.
>>
>> The usual disclaimer: I don't know your tax situation or any legal
>> requirements for how you may need to account for all of this.
>>
>> Stan Brown
>> Tehachapi, CA, USA
>> https://BrownMath.com
>> _______________________________________________
>> gnucash-user mailing list
>> gnucash-user at gnucash.org
>> To update your subscription preferences or to unsubscribe:
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>> -----
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
>> _______________________________________________
>> gnucash-user mailing list
>> gnucash-user at gnucash.org
>> To update your subscription preferences or to unsubscribe:
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>> -----
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>