FAQs

Question: How can I enter the future grants of stock options?

Answer: Suppose a party is going to receive $5,000 per year in stock options for the next five years.

Here's how you would enter that into the software:

1. Enter the options as a Cash & Investment line item. Estimate the value of the options today. (This is beyond the purview of the software.)

2. Click "more info" and scroll down to the lines "View/Edit annual value from this asset" and "View/Edit annual income from this asset."

3. Click "View/Edit annual income from this asset," and enter the $5,000 income from each grant for each of the next 5 years. (See below if the income is partially non-taxable or partially capital gains.)

4. Click "View/Edit annual value from this asset," and override the entries to reflect the asset value at the end of each year (e.g., $20,000, $15,000, $10,000, $5,000, 0). (These numbers are too high, but that's the ballpark.)

5. At the top level, set the tax category as "Interest," so the grants will be taxable as ordinary income.

6. If a portion of the grant income will be tax-free or capital gains, create a second cash or investment asset; specify the tax category of that second asset appropriately, and override the income of that second asset, as you did above, with the tax-free or capital gain portions of income. You would also reduce the income of the first asset, so that the income of the two assets combined reflected the actual total income.