Sentences with phrase «of the tax year disqualify»

Not exact matches

The tax consequences of a disqualifying disposition apply in the year the disposition occurs.

The underlying premise is that the profit from shares sold in a disqualifying disposition is taxed at 35 % under the regular income tax, the AMT rate on shares that are not sold in the year of exercise is 28 %, and the capital gains rate on shares sold the following year is 15 %.

There is a subtle difference in the tax treatment of qualifying vs disqualifying dispositions even in situations where ownership has been for more than a year to qualify for long - term capital gains — this can be significant in cases where the share price has gone down since the purchase:

«If you do not meet one of the criteria — for example, if you fail to distribute all assets within one tax year — your NUA election will be disqualified, and you would owe ordinary income taxes and any penalty on the entire amount of the company stock distribution.»