Working for equity

[gt3250b]

I was wondering if anyone could shed some light on this issue. If I am
working for equity only at an early-mode, non-funded startup, are there
any deductions I can take, or are there any other tax implications?

[barr...@gmail.com]

The equity is taxable income to and could be subject to payroll taxes
depending on what kind of entity you have. The IRS regs are clear cut
on this issue

[gt3250b]

Thanks! What if the equity is stock-options only, and have essentially
no value? The entity is a unfunded, very early mode startup.

[barr...@gmail.com]

Then there would be no value and no basis for establishing value. When
you state unfunded then I assume no value for the Corporation. There
could be value though if there is market value for the unfunded
Corporation. For example a shelved Corporation has value even if no
assets. They are bought and sold everyday and the market value is easy
to establish.