Squeezing a Balloon: Potential Impact of the American Jobs Creation Act Straddle Rules on the Tax Consequences of Hedging Nonqualified Stock Options
Author: James H. Combs.
Source: Volume 19, Number 05, May/June 2006 , pp.5-16(12)
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Abstract:
The American Jobs Creation Act of 2004 (the “AJCA”) enacted numerous changes to the Internal Revenue Code. While the AJCA’s amendments to the international and deferred compensation tax rules affect a broad range of taxpayers and have garnered significant attention, Congress also included several amendments to the straddle rules of Section 1092 that affect a narrower class of taxpayers. Congress has provided some simplification with its amendments to Section 1092, but addressing known issues regarding the identified straddle rules now generates new issues in other areas, and Treasury or the IRS will have to provide additional guidance to provide the necessary certainty.Keywords:
Affiliations:
1: Honigman Miller Schwartz and Cohn LLP.