Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Entire DC Network
Taxing Compensatory Stock Rights Transferred In Divorce, Gregg Polsky, Kathleen Delaney Thomas
Taxing Compensatory Stock Rights Transferred In Divorce, Gregg Polsky, Kathleen Delaney Thomas
Scholarly Works
Stock-based compensation has become increasingly prevalent in recent years. As a result, many high net worth divorces now result in the transfer of compensatory stock rights from the employee spouse to the nonemployee spouse as part of the marital settlement. Despite this growing trend, the tax consequences of these transfers have not yet been explored fully. This Article endeavors to fill this void and explain both the planning opportunities and potential pitfalls in transferring compensatory stock rights in divorce. These transfers can shift ordinary income from a high-bracket spouse to a lower-bracket spouse, creating a tax surplus that enlarges the …