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409A Valuation Methods

409A Valuation Methods

Submitted by • June 21, 2016

409A Valuations applies whenever you issue deferred compensation to your employees. 409A Valuations determined that the fair market worth of the option cost is greater than the strike rate at the date of grant. Under Section 409A, an optionee who is granted a interchange for services may be subject to instant income taxation on the “spread” between the exercise rate and the fair market worth at the end of the year in which the nonqualified stock option vests and a 20% tax penalty plus interest.

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Voted by DeepakSingh1

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