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Pension Resource

Treas. Reg. § 1.423-1

Applicability of section 421(a).
eCFR editorial change effective 2016-09-09 · current · last amended by T.D. 9471, 74 FR 59078, Nov. 17, 2009
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(a) General rule. Subject to the provisions of section 423(c) and § 1.423-2(k), the special rules of income tax treatment provided in section 421(a) apply with respect to the transfer of a share of stock to an individual pursuant to the individual's exercise of an option granted under an employee stock purchase plan, as defined in § 1.423-2, if the following conditions are satisfied—
(1) The individual makes no disposition of such share before the later of the expiration of the two-year period from the date of the grant of the option pursuant to which such share was transferred or the expiration of the one-year period from the date of transfer of such share to the individual; and
(2) At all times during the period beginning on the date of the grant of the option and ending on the day three months before the date of exercise, the individual was an employee of the corporation granting the option, a related corporation, or a corporation (or a related corporation) substituting or assuming the stock option in a transaction to which section 424(a) applies.
(b) Cross-references. For rules relating to the requisite employment relationship, see § 1.421-1(h). For rules relating to the effect of a disqualifying disposition, see section 421(b) and § 1.421-2(b). For the definition of the term “disposition,” see section 424(c) and § 1.424-1(c). For the definition of the term “related corporation,” see § 1.421-1(i).
(c) Effective/applicability date. The regulations under this section are effective on November 17, 2009. The regulations under this section apply to options granted under an employee stock purchase plan on or after January 1, 2010.
Source credit, amendments & notes

[T.D. 9471, 74 FR 59078, Nov. 17, 2009]

Treas. Reg. § 1.423-1 — Applicability of section 421(a). · eCFR editorial change effective 2016-09-09 · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr26-1.423-1&asof=2018-01-12 · printed Oct 16, 2026
On this page
  • (a) General rule.
  • (b) Cross-references.
  • (c) Effective/applicability date.
Implements
I.R.C. § 423 Employee stock purchase plans
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Also cited in 1 other documents
IRS / Treasury
Proposed Rules
  • REG-106251-08Proposed Sep 29, 2008 — Proposed regulations under section 423 of the Code provide the requirements that must be satisfied in order for a plan to meet the definition of an employee st… (e)(1)

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Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Apr 1, 1997Mar 31, 2005CFR 2004 annual edition (revised as of 2004-04-01) run 127T.D. 7728, 45 FR 72650, Nov. 3, 1980View
Apr 1, 2005Mar 31, 2010CFR 2009 annual edition (revised as of 2009-04-01) run 127T.D. 9144, 69 FR 46419, Aug. 3, 2004View · Redline (sign in)
Apr 1, 2010currenteCFR editorial change effective 2016-09-09 run 2T.D. 9471, 74 FR 59078, Nov. 17, 2009View · Redline (sign in)
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