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sure, but how are they going to pay the AMT tax on that? options from 10 years ago are in the $0.XX range and 409a FMV today even after the drop is like $58
by richiezc 6y ago
sure, but how are they going to pay the AMT tax on that? options from 10 years ago are in the $0.XX range and 409a FMV today even after the drop is like $58
- naveen99 6y agoHow does an ipo help with that ? if you have options, you have to face tax consequences when you exercise them with or without an ipo.
- richiezc 6y agob/c you can sell them at that point, the shares today are illiquid and they'd probably have to do something like a prepaid variable forward to be able to afford to exercise and pay tax (~23% of FMV - strike price) we're talking millions of dollars for early employees who didn't do an 83b election. once airbnb IPOs they could do either of the following: * Cashless (exercise and sell to cover: sell enough of your shares to cover the purchase price and applicable fees and taxes. * Cashless (exercise and sell): sell it all
- naveen99 6y agoYou clearly know more about this since it affects you personally. But airbnb shares aren’t that illiquid. I purchased some myself in a secondary market. You might lose 5% to commission, which I guess is enough to want an ipo if you have a lot of money tied up there.
- sandeeps_ 6y agoHow/where can one purchase Airbnb shares? Is there a minimum amount needed to be purchased?
- Xavdidtheshadow 6y agoWhat site/market did you use? That's an interesting concept I had never heard of!
- naveen99 6y agoThe company I used Equidate got renamed then acquired by sharespost. equityzen has lower minimum investments.
- richiezc 6y agofrom friends who have sold its more in the 15% commission range, there's also a fair amount of tax and legal headaches. - replying to myself since there's a max threading depth on HN?
- naveen99 6y ago15% seems excessive... You could probably find a buyer yourself and work directly with lawyers to make it happen at a much lower flat rate instead of commission if you have many millions worth. There seems to be a few variables associated with loss of reply button... looks like it returned. Maybe minimum and maximum time limits, max thread depth, other person is Re-editing...
- maest 6y agoI would expect there to be money lenders willing to extend collateralised loans to finance the tax. Generally, it's not extremely difficult to obtain liquidity if you are reasonably paper-rich.