4 ms·

They are not taxed as income but are subject to AMT, so can absolutely leave you with a large tax burden if you aren't cautious. https://www.nceo.org/articles/

• hkmurakami 11y ago
  If it's a "token amount", then that's probably unlikely unless you have other large deductions (ex: mortgage, property tax)
• chuckkir 11y ago
  It can be quite large too. However, you can recover that money a few $k at a time over the next several years if you are not subject to AMT (and don't sell the shares). Granted you will have to pay the taxes again when you sell the shares, but at that point it's capital gains (15%) so if it's a long term prospect it may well make sense.