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I work for a closely-held corporation that wants to pay part of my
compensation in its company stock. What are my tax consequences?
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 If the stock does not
have much value, take the stock right now and have the company pay you a bonus equal to
the taxes payable on receipt of the stock. The stock received is treated as compensation
so the company needs to withhold on it. Otherwise, there are a variety of employee stock
option programs that could meet your needs.
Also, you'll want to verify that the stock qualifies under IRC Sec. 1244 and you own it
without restrictions. Sec. 1244 stock allows an ordinary loss, rather than a capital loss,
on sale, or if the stock becomes worthless - a big advantage in such a circumstance.
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I bought a home in California 7 months ago and now want to sell it and
move to Portland. I'll make $44,000 on the transaction. May I rollover the gain into my
Portland home?
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No, the residency rollover rules were terminated about 6 years ago. The
current rule involves a residency exclusion which entitles you to exclude up to $250,000
in profits from the sale of a residence ($500,000 for joint filers) provided you owned and
lived in the residence for at least 24 months. It sounds like you do not meet this test,
unless your move was due to a change of employment, health or other unforeseeable
circumstance, in which case, 7/24 of the exemption would apply.
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Do you believe an off-shore asset protection trust can be successfully
used to defeat a creditor's claim?
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No. In my view, the creation of an off-shore trust to
thwart U.S. law or potential creditors is improper, usually fraudulent and sometimes
illegal. There could be legitimate uses for off-shore trusts, such as estate planning with
multi-jurisdiction beneficiaries, but such trusts must comply with IRS disclosure and
reporting requirements.
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Compensation Paid in Stock
