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I've had a similar tax issue which caused a few 100k in taxes on unrealized gains. That was not a happy day and I could barely pay the tax bill. In my case the

I've had a similar tax issue which caused a few 100k in taxes on unrealized gains. That was not a happy day and I could barely pay the tax bill. In my case the issue involved moving from The Netherlands to the US. As far as I know the US is one of the only countries which taxes unrealized gains. In The Netherlands you only get taxed once you actually make the money. The VC industry is world class here in the US, but some of these tax rules are so backwards that they do real damage to startups and the economy as a whole.

nemo44x 9y ago
There is a provision in the House version of the tax bill to not tax the exercising of options until there is a liquidity event. In that case you wouldn't be taxed on the unrealized gain until you could sell the stock. I still think with options it should be as you've pointed out a tax-free event until you actually sell the equity for cash.