409A Valuations


We expect recently-issued proposed regulations under Section 409A of the Internal Revenue Code to significantly and immediately affect the way in which private companies set the exercise prices for their stock options and values for other stock-based compensation. The tax consequences for the recipients of stock options are adverse. They include taxation at the time of option vesting rather than at the date of exercise. The granting company is required to withhold applicable income and employment taxes at the time of option vesting, and possibly additional amounts as the underlying stock value increases over time.

Santa Fe Capital Group is very experienced in valuing privately-held companies. We will be pleased to value your privately-held company for purposes of establishing the value of the options to meet the requirements of Section 409A of the Internal Revenue Code. Call us at 505-753-0343 ext 101.