Practice question
An employee receives stock options for employment services, granted in 2025 and exercised in 2026. She says compensation must always be cash and therefore exercise cannot enter gross income. What does amended Section 32(A)(1) provide?
- Only cash remuneration can be income
- Equity compensation is excluded forever
- Specified equity-based compensation is included at exercise; noncash form alone does not exclude it
- All stock options are automatically capital gifts
- The employer’s chosen label overrides the statute
Legal references
- RA 12214 (CMEPA), Sections 3-4, 8 and 28, amended NIRC Sections 22, 24 and 32 and transition: https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html
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