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You get switched to long term capital gains 1 year after exercise or two years after the grant start date, whichever is later.
by bgentry 8y ago
You get switched to long term capital gains 1 year after exercise or two years after the grant start date, whichever is later.
- theIV 8y agoI don't believe the "or" part of this statement is right. I think you still need to hold for 1 year after exercise AND two years after the grant for long term to kick in. Not sure what the best source on this is, but a quick DDGing: https://www.fool.com/knowledge-center/tax-rate-on-exercising-stock-options.aspx https://www.fool.com/knowledge-center/tax-rate-on-exercising...
- bgentry 8y agoI think we're saying the same thing. If I early exercise my options on day 1, then I still have to wait until the 2 years after the grant date (2 years of employment) to get long term capital gains treatment. If I wait 4 years, then exercise, then I have already satisfied the 2 years post-grant requirement, but I still have to wait a year after the exercise to get long term capital gains treatment. The key part was my last clause: "whichever is later".