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Question for the Money Doctors

Question submitted on Jan 15, 2021.


What would be the best way for an employer to get tools and resources to explain the various tax scenarios to their employees who just had their company go through an IPO and are in the middle of their lock-up period?

Should they just find a CPA or Tax Attorney to give a talk in general terms, or are there companies that will do this?


Congratulations on the IPO (Initial Public Offering).   During the lock-up period, the employees of the company cannot sell or trade any of the company stock. There may be other restrictions on the stock.     

It would have been a good idea to have an expert come to your office to explain the tax and financial planning consequences of your stock plans before the IPO.   It may have been advantageous for them to exercise their stock options before the IPO.  Or if the employees have Restricted Stock, it may have been a good idea to consider an 83(b) election.

Nevertheless, it is still a good idea to have an outside expert come to your office to explain your stock plan and understand what they can do and the tax and financial planning consequences.

I strongly suggest engaging in someone who is independent and do not sell any investment products.  Also this person not only has to be knowledgeable about tax and financial planning, but also employee stock plans.

Get a referral from someone who is in a similar situation.  Visit this link to find a CPA in your area.

Good luck!

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