Section 423

Section 423

The government agency responsible for the supervision and regulation of the securities industry and markets, as well as public securities offerings and the ongoing disclosure obligations of public companies.

Section 423

A section of the Internal Revenue Code governing the taxation of an employee stock purchase plan (ESPP). Under an ESPP, a company allows certain employees to buy its stock at a discount from fair market value. According to Section 423, an employee who holds stock purchased under an ESPP for at least two years does not have to treat the discount as income and therefore does not have to pay taxes on it. Stocks held for this long are called "qualified" because they qualify for favorable tax treatment under Section 423.
References in periodicals archive ?
Specifically, "an example of a non-compensatory plan is the `statutory' employee stock purchase plan that qualifies under Section 423 of the Internal Revenue Code.
Executive Stock Options and Stock Appreciation Rights will guide you through such vital topics as: types of stock options available, including non-qualified and incentive stock options; stock appreciation rights; SEC disclosure and registration requirements; liabilities under Section 16(b); Rule 16b-3; stock option repricing; Section 423 stock purchase plans; federal tax law; state corporation and blue sky laws; federal securities law; accounting practice under revised Statement of Financial Accounting Standards No.
An option to purchase employer stock (other than IRC section 422 incentive stock options or section 423 employee stock purchase plan options) does not defer compensation if?
Section 423 of the Senate bill would disallow a deduction for certain fines, penalties, or other amounts paid at the direction of a government entity in relation to a violation of law, investigation, or inquiry into a potential violation of law.
The reduction of stock compensation expense is due to a review of the Company's employee stock purchase plan that determined the plan qualifies for non compensatory treatment under Section 423 of the Internal Revenue Code and therefore the plan qualifies for non compensatory treatment for financial reporting as well.
Compared with employee stock purchase plans qualifying under section 423 and other tax-qualified plan arrangements, however, ISOs offer greater flexibility because they are not subject to minimum participation and nondiscrimination rules.
Approval of a 423 Plan, under section 423 of the US Internal Revenue Code
It is designed to manage every aspect of qualified Section 423 stock purchase plans.
In other developments, the company announced shareholder approval of the Datametrics Employee Qualified Stock Repurchase Plan, which authorizes company employees to purchase shares of Datametrics common stock through payroll deductions in accordance with Section 423 of the Internal Revenue Code.
A while back, the Internal Revenue Service (IRS) published Final Regulations under Section 6039 of the Internal Revenue Code, which requires employers to file certain statements for employees exercising incentive stock options and transfer shares acquired under employee stock purchase plans under Code Section 422 and Code Section 423 respectively.
The IRS has indicated that it is developing two new forms that taxpayers will use to fulfill the reporting requirements: Form 3921, Exercise of an Incentive Stock Option Under Section 422(b), and Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423 (c).
However, Section 409A does not apply to: (1) incentive stock options; (2) restricted stock and nonqualified stock options with an exercise price that can never be less than fair market value of the underlying stock on the grant date of the nonqualified stock option; (3) employee stock purchase plans qualified under Section 423 of the Code; (4) nondiscounted SARs with respect to stock of private as well as public companies' stock; and (5) puts/calls if the purchase price is at fair market value.