Hi all,
This probably has been discussed in the past but i couldn't find.
Taxpayer, US citizen living abroad and working abroad, is granted stock options of a private foreign company in exchange for services as a self employed. The stock options have an exercise below the stock's FMV at the time of grant. So it seems that there is 409a penalty exposure. What are the ways to avoid the penalty?
Can it be as simple as just reporting additional income on the tax return for the year in which the options were granted? The income would be the difference between the exercise price and FMV at the time of grant. This way there is essentially no deferral of income.
TIA for any comments and insight