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This is the same kind of logic that taxes private company stock gains on vesting even if the stock isn't sellable, if the "official" value at vest exceeds the g
by zamfi 7y ago
This is the same kind of logic that taxes private company stock gains on vesting even if the stock isn't sellable, if the "official" value at vest exceeds the grant value.
Whether you can sell something to cover the taxes just doesn't seem relevant to the IRS!
- taneq 7y agoThis is what boggles my mind - what is the "value" of something if not the amount of money you can sell it for? If you can't sell something and it doesn't generate you any revenue then its value is zero.
- kurtisc 7y agoThey couldn't sell it currently, if the law changes in the future (or if it can be moved to another jurisdiction) then it could be sold for a non-zero value.
- Teknoman117 7y agoThere is no way you could justify assigning value to something on the grounds that "if laws change then it has value."
- brohee 7y agoYou do, it's factoring the fact that something that cannot be sold legally can still has black market value, which is definitely the case for stolen art and antiques, protected species etc...
- kurtisc 7y agoI disagree. Markets react to election results.
- TheOtherHobbes 7y agoValue is a very nebulous concept. But laws consistently affect the prices of everything from food to real estate to medical care to weapons to labour. The changes aren't usually zero -> something, but that's a footnote to the general principle.
- taneq 7y agoPrices are real. Value is imaginary until something changes hands.
- ajsnigrutin 7y agoSo they can tax (the profits, price difference) when they sell it.
- eeeeeeeeeeeee 7y agoCouldn’t they charge for viewing? Or charge for loaning it? I still think the appraised value is nuts with that law in effect.
- gnomewascool 7y ago> This is the same kind of logic that taxes private company stock gains on vesting even if the stock isn't sellable, if the "official" value at vest exceeds the grant value. I'm not a financial specialist, but googling[0] suggests that you can, say, use restricted stock as collateral for loans, at least under some circumstances, so the situation is slightly more subtle than having (currently) worthless pieces of paper that you have to pay tax on; not that I'm saying that the IRS is necessarily right. [0] https://easystockloans.com/can-borrow-restricted-stock/ https://easystockloans.com/can-borrow-restricted-stock/
- H8crilA 7y agoI keep hearing that, but why can't you sell it? Surely brokering such sales (to accredited investors) is a profitable opportunity, so someone should be doing that. Charging a few % sounds like a reasonable fee for brokering rather illiquid securities. Not just in silicon valley which mints huge quantities of fresh private equity. At least large VCs should see it as an opportunity to increase holdings at a discount as employees inevitably rotate in the company.