Auriga Guide Series
Reporting Considerations Guide.
Informational overview of transaction-related reporting concepts, cost-basis considerations, and documentation topics relevant to private secondary markets.
01
Understanding Transaction Reporting Complexity
Private company equity transactions may involve significant reporting, recordkeeping, and documentation considerations. Reporting obligations can vary materially depending on the type of equity involved, exercise history, transaction structure, holding periods, and applicable federal and state tax rules.
Shareholders
Companies
Transfer agents
Institutional counterparties
Legal counsel
Tax advisors
02
Equity Documentation Considerations
Shareholders should generally maintain organized records relating to private company equity holdings.
Stock option agreements
RSU agreements
Restricted stock agreements
Exercise confirmations
Share certificates or electronic ownership records
Equity plan documents
Shareholder agreements
Company approval documentation
Transfer approval forms
Capitalization table records
Settlement confirmations
Wire documentation
03
Cost Basis Considerations
Cost basis generally refers to the amount used to determine gain or loss for tax reporting purposes.
Exercise price paid
Fair market value at exercise
Vesting-related income inclusion
Prior tax reporting
Transaction fees or expenses
Partial sales or transfers
Stock splits or recapitalizations
Corporate conversion events
04
ISO, NSO & RSU Reporting Concepts
Different forms of equity compensation may involve different reporting frameworks.
Incentive Stock Options (ISOs)
Exercise reporting
Holding period tracking
AMT-related documentation
Disqualifying disposition considerations
Non-Qualified Stock Options (NSOs)
Ordinary income recognition
Payroll withholding reporting
W-2 treatment considerations
Basis adjustments
Restricted Stock Units (RSUs)
Vesting-related income reporting
Share withholding considerations
Settlement timing
Subsequent sale reporting
05
Secondary Transaction Documentation
Private secondary transactions may require substantial transaction-related documentation.
Stock purchase agreements
Transfer agreements
Company consent documentation
Rights of first refusal (ROFR) notices
Investor diligence materials
Transfer agent instructions
Settlement documentation
Tax reporting support records
Legal closing documentation
06
Holding Period & Transfer Tracking
Tracking holding periods may be important for capital gains treatment, ISO analysis, QSBS considerations, and transaction reporting.
Original grant dates
Exercise dates
Vesting schedules
Acquisition timing
Transfer dates
Partial sale allocations
Gifting or estate planning transfers
Corporate restructuring events
07
Company & Transfer Agent Coordination
Private company transactions often require coordination with company legal teams, finance departments, transfer agents, and third-party administrators.
Transfer approval procedures
Cap table updates
Share legend requirements
Settlement timing
Tax form availability
Recordkeeping obligations
Administrative processing timelines
08
Tax Form Considerations
Private company shareholders may receive various tax forms depending on equity structure, exercise activity, and transaction timing.
Form W-2
Form 1099-B
Form 3921
Form 3922
K-1 considerations (where applicable)
State reporting obligations
Estimated tax requirements
09
Planning & Recordkeeping Considerations
Maintaining organized records may assist with future tax preparation, liquidity planning, transaction review, and compliance analysis.
Retaining exercise confirmations
Maintaining historical valuation records
Tracking holding periods
Organizing transaction documentation
Coordinating records with tax advisors
Reviewing company communications
Maintaining secure document storage
Institutional disclaimer
This guide is provided solely for informational and educational purposes and does not constitute legal, tax, accounting, investment, or financial advice.
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Auriga Financial does not provide legal or tax advice.
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Auriga Financial does not operate an exchange, trading platform, or alternative trading system. This material should not be interpreted as facilitating an open market for privately held securities.
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Any transaction discussions, if applicable, would be conducted only pursuant to separate review processes, applicable securities law requirements, issuer approval procedures, and firm compliance policies.
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References to reporting concepts, tax forms, basis calculations, holding periods, or transaction structures are educational only and may not apply to all individuals or circumstances.
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Private company equity reporting considerations are highly fact-specific and subject to applicable federal and state tax rules, legal interpretation, company policies, and regulatory developments.
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Shareholders should consult qualified legal, tax, and financial advisors before making any decisions relating to private company equity, transaction reporting, or potential liquidity transactions.
10
Important Limitations & Risks
Reporting outcomes may vary materially depending on equity structure, company policies, tax treatment, transaction history, and evolving legal or regulatory frameworks.
Incomplete documentation
Incorrect basis calculations
Holding period errors
Tax reporting discrepancies
Delayed form availability
State tax differences
Administrative processing delays
Regulatory or legal changes