3 ms·

I don't know about how Canadian taxes work, but at least in the US, you have to pay taxes on stock you receive, even if they are illiquid (but with stock option

by rhc2104 14y ago

I don't know about how Canadian taxes work, but at least in the US, you have to pay taxes on stock you receive, even if they are illiquid (but with stock options, taxation does not occur until you exercise).

blindhippo 14y ago
It's the same in Canada as far as I understand - but thing is, options aren't compensation unless the business is sold or goes public. Unless I'm misunderstanding something, in which case I'll have to change my mind on this. If I'm issued stock options in a privately held company at $1 per share, and I vest 200, I get $0 (the value hasn't changed since I was issued them). In order for the value to change, the company needs to be purchased or be listed on an exchange. No?
- rhc2104 14y ago
  Okay, I misinterpreted "give me actual stock" as preferring stock to options. Your definition of "actual stock" seems to be publicly traded stock.
  - blindhippo 14y ago
    In a sense yeah. The share option agreements I've seen haven't provided a way to flip the options into proper shares in the company that are under my name. So the company boasts to me that I have "stock" in the company - I am a "owner" when in reality I'm not at all. I find it disingenuous. Unless I'm completely misunderstanding this - I can never get a clear answer on any of this stuff.
    - Evbn 14y ago
      You seem confused. Private companies don't have any liquid stock to give. Options aren't the issue, just subtract salary minus share price and taxes to get net.
      - blindhippo 14y ago
        How am I confused? Get net of what? My point is that local start-ups are misrepresenting share options as "stock" in the company, telling me I have ownership when in fact I do not. And they use this notion that I am a "owner" to extract far more then the 40 hours per week I'm contracted to do (it's "start-up culture" after all). I like the work and problems that start-up's tend to focus on, but the way it gets represented here is a joke to professionals.
flyinRyan 14y ago
I suspect every country taxes stock, certainly every country I'm aware of. The thing that's different in the US is you only get taxed capital gains (much lower). In the other countries I'm familiar with (Canada isn't one of them) stock is just income and gets taxed via the normal income tax mechanisms.

by rhc2104 14y ago

blindhippo 14y ago

It's the same in Canada as far as I understand - but thing is, options aren't compensation unless the business is sold or goes public. Unless I'm misunderstanding something, in which case I'll have to change my mind on this. If I'm issued stock options in a privately held company at $1 per share, and I vest 200, I get $0 (the value hasn't changed since I was issued them). In order for the value to change, the company needs to be purchased or be listed on an exchange. No?

rhc2104 14y ago
Okay, I misinterpreted "give me actual stock" as preferring stock to options. Your definition of "actual stock" seems to be publicly traded stock.
- blindhippo 14y ago
  In a sense yeah. The share option agreements I've seen haven't provided a way to flip the options into proper shares in the company that are under my name. So the company boasts to me that I have "stock" in the company - I am a "owner" when in reality I'm not at all. I find it disingenuous. Unless I'm completely misunderstanding this - I can never get a clear answer on any of this stuff.
  - Evbn 14y ago
    You seem confused. Private companies don't have any liquid stock to give. Options aren't the issue, just subtract salary minus share price and taxes to get net.
    - blindhippo 14y ago
      How am I confused? Get net of what? My point is that local start-ups are misrepresenting share options as "stock" in the company, telling me I have ownership when in fact I do not. And they use this notion that I am a "owner" to extract far more then the 40 hours per week I'm contracted to do (it's "start-up culture" after all). I like the work and problems that start-up's tend to focus on, but the way it gets represented here is a joke to professionals.

flyinRyan 14y ago

I suspect every country taxes stock, certainly every country I'm aware of. The thing that's different in the US is you only get taxed capital gains (much lower). In the other countries I'm familiar with (Canada isn't one of them) stock is just income and gets taxed via the normal income tax mechanisms.