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When are property transfers taxed to an individual and when does the employer get a deduction...

When are property transfers taxed to an individual and when does the employer get a deduction for such transfers? Are there any instances in which an employee can choose the year of taxation for property transfers?

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Answer #1

If a property is transferred to an individual as consideration of services perfromed for some other person, such transfer shal be taxed in the hand of that individual (who receives property) in the first taxable year in which the rights of the person having the beneficial interest in such property are transferable.

Employer shall get the deduction in same year in which the property gets taxable in the hand of individual performed service.

If stock options are given to the employee for service in the company and there is no readily ascertainable fair market value of stock at the time of grant, the year of taxation would be when the option is exercised and stock is transferred to Employee.

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