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To: MulhollandDrive who wrote (4951)	9/23/1998 11:20:00 AM
From: j_b	Read Replies (1) \| Respond to of 67261

<<I'm unclear about when the stock transaction is taxable. It was my assumption that it would taxable when the corporation sold the stock,>> If stock is obtained for non-employee services, it is taxable at the time is issued. The same for options or warrants. It doesn't matter if the entity performing the services is a corporation or an individual. If the transaction related to an employee, different rules apply, and the transaction may not be taxable until the sale of the stock. Imagine the company paid you for your services by giving you free advertising for your company on their site. That free advertising isn't really free - you provided services for it. Therefore, the amount you got paid would be equal to the real value of the advertising, or to whatever your normal charges would have been for the services you rendered. Being paid with stock is the same thing. The part that would be deferred is the appreciation that the stock made after you acquired it. However, had they paid you in cash, and you immediately purchased stock, you would be in the same position.