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Of course, a $5 million exit is not $5 million in the bank. Depending on where you live, and a lot of other factors about the sale, it could mean as little as <
by boucher 16y ago
Of course, a $5 million exit is not $5 million in the bank. Depending on where you live, and a lot of other factors about the sale, it could mean as little as <$3 million after taxes (avg. case probably being around $4 million).
- nostrademons 16y agoI'm curious whether stock-swap acquisitions get taxed as income or capital gains. If it's capital gains, can you hold the acquiring company's stock until you're fully vested, then quit and sell while unemployed to take advantage of the long-term capital gains rates in a really low bracket? (Which, last time I checked, were something like 5%.) What's your cost basis then? Is it the initial par value when you formed the original company?
- vicaya 16y agoI'd assume all founders would know about 83b election (us founders anyway.) to cap the tax rate at 15% (long term capital gain)
- rdl 16y agoBy 15% you actually now (as of next year) mean 20% + 3.8% + (state tax, such as California's 10.3%)