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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs
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To: GVTucker who wrote (753)8/9/2005 9:45:35 AM
From: R2ORead Replies (1) of 786
 
Stock option expense does reduce ... taxes

Would you be kind enough to reference IRS document with permitted methods for calculating option expense (similar to methods used to calculate depreciation)?

If one can reduce present taxes based on the calculated option expenses, does one then need to record a (perhaps) gain when they are actualized (similar to depreciation and final disposal of depreciated property)? Would the IRS require one to escrow some amount against the possible future tax liability?

I am wondering: if the IRS permits deductible option expense (which is an estimate of future value), why there would be any discussion about valuation methods as it would seem reasonable to use the very same methods permitted 'for many years' by the IRS?
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