Larry Israel wrote:

- quote -

Restricted stock grants are not taxed when received unless
the t/p makes a Section 83(b) election in a timely manner.
By definition, restricted stock is not transferable and is
subject to substantial risk of forfeiture. Thus, no income
is recognized until such time that the stock award vests.

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My son, a US citizen works for a foreign subsidiary of an
American company. This subsidiary used to sometimes award
stock options to employees. The American and local tax
rules for these were the same, so that the U.S. taxes were
offset by the local taxes, which were higher.

Now they have gone to giving not options, but restricted
stock. As I read the IRS publication, these are taxable as
income when received, and when sold there can be a capital
gain or loss. The local tax people do not tax these at all
when received, only when sold. This can lead to a situation
where there is US tax obligation in the year when received,
with no local tax to offset it. The year when sold, he
would have a local tax obligation, but this could not offset
any US taxes.

He has not checked whether the local tax would take
cognizance of the US tax paid, but that is doubtful, as he
is a local resident working for a local company.

Any suggestions?

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >