7 ms·
With stock options would the 5 year clock start only when the options are exercised, when they were granted, or when they vested?
by liminal 7y ago
With stock options would the 5 year clock start only when the options are exercised, when they were granted, or when they vested?
- akavi 7y agoBoth the 50 M$ valuation rule and the 5 year clock start time apply when the stock is exercised. Note, however, that the "valuation" from a QSBS perspective is usually significantly less than the PR valuation you hear when a startup raises a round (which assumes all shares are valued at the new preferred share price)
- jameslevy 7y agoThe five year clock starts when you early exercise and file an 83b with a vesting schedule, or would the clock start only once the stock has vested? I think it's the former, when you early exercise, but the language seems a bit confusing.
- akavi 7y agoThe former, but as the sibling comment says, if you're in this situation a your own CPA is a very worthwhile investment.
- techslave 7y agoabout a year ago i received 2 opinions from 2 very well regarded CPAs that the 5 year clock starts at exercise, including early exercise. however, as this is an anonymous forum, filled with scoundrels, tax and legal “advice” should always be ignored with prejudice. you would do well to ask an accountant or tax advisor on your own.
- CalChris 7y agoFor QSBS, you have to own the stock. Granted means you can vest the options over time. Vested means you can exercise the options. Exercised means you own the stock.