[GNC] How to implement tracking employee stock options?
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dfrankow at gmail.com
Fri Jan 3 10:00:54 EST 2025
I mean options granted to employees (usually not tradable), not calls and
puts.
https://bugs.gnucash.org/show_bug.cgi?id=313663 is an enhancement request
for this, filed in 2005.
https://bugs.gnucash.org/show_bug.cgi?id=799420 has some discussion about
this, because the QIF importer broke due to options grants.
In 799420, Patrick suggests putting a message out on a mailing list to get
thoughts on how to implement employee stock options, so here I am.
Thoughts?
===
Prior references:
https://lists.gnucash.org/wiki/FAQ#Q:_How_do_I_enter_ISOs_.28Incentive_Stock_Options.29_that_I_exercised_for_a_nonpublic_company.2C_which_are_valuable_only_on_paper.3F
says basically: "don't track them until you exercise them; once you
exercise them, just enter the stock". So, that does not handle grant,
vest, or expire.
https://www.google.com/search?q=site%3Alists.gnucash.org+stock+options
shows some posts relevant to stock options grants on the mailing lists:
- https://lists.gnucash.org/pipermail/gnucash-user/2001-June/001405.html
- https://lists.gnucash.org/pipermail/gnucash-user/2007-May/020514.html
-
https://lists.gnucash.org/pipermail/gnucash-user/2011-September/041116.html
(There are a couple of other posts that appear to be about calls and puts.)
A couple of the relevant threads have proposals about how to do this given
current gnucash functionality. To really track options, I think you'd need
new functionality, since they are not like stocks.
===
The short version of how stock options work in the U.S.:
- You are granted stock options that are likely not vested, with a "strike
price", the price of the stock at the moment of the grant.
- Over time they vest, e.g., monthly.
- With vested options, you own the option to buy a stock, but you don't own
the stock.
- You can exercise vested options, in which case you buy the stock at the
strike price.
- If you don't exercise the option, it can expire, in which case you don't
own it anymore.
This behavior does not depend on where you live in the U.S.
Tax behavior of options is very complicated. I don't think gnucash should
try to model it, especially as a first stab.
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