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Part of my negotiations for a new job I've taken is to own a percentage of the company (which is a very small corporation, until now owned by one person). The owner of the company is telling me that when I take possession of the shares he will give me, I'll need to pay taxes on the value of the shares. Is this correct? First of all, I'm not realizing any monetary advantage, which I thought was a criteria for taxes to be paid. Second, I don't want to pay taxes on the "guess" about what those shares are worth. When I leave the company and sell those shares back to the owner or to another party, I'll be happy to pay tax on that sale, but it seems I shouldn't have to pay anything until then.

Actually, you probably are receiving some "monetary advantage" inasmuch as the stock you're receiving has some value. What the value is depends on several factors including the vesting schedule, what restrictions are placed on your ability to sell it, and the percentage ownership that it represents just to name a few. You might want to take a look at the topic of stock compensation at http://www.fairmark.com.

Since this is related to employment, it is likely that this would be stock compensation. To the extent that the stock is vested, it is considered compensation income to you and withholding must be done by the employer. If the stock vests periodically over time, each time stock vests, you'll have compensation income equal to the value of the stock that vested and the employer will be required to withhold based on that value.

You might want to explore alternate arrangements such as a purchase of stock by you, stock options, etc.
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