4 ms·
> The worst outcome is I make no money; the best is that I keep 70% of my shares without paying for them. They even pay AMT. I'm not 100% sure about this, but
by nrmitchi 4y ago
> The worst outcome is I make no money; the best is that I keep 70% of my shares without paying for them. They even pay AMT.
I'm not 100% sure about this, but IIRC these programs are typically structured as a tax-free loan to you. If the shares end up worthless, the loan is then forgiven.
So while you may not be out the principle of the loan, or the AMT, the forgiven loan may be taxed as income at some point in the future.
- fortran77 4y agoNo. The worst outcome is you make no money AND you have to pay AMT on gains you never were able to realize.
- dilyevsky 4y agoIs amt really an issue if you’re high income swe? (especially if double high income). Seems like since trump’s “tax cuts” your normal rate will always be higher than (base + options * strike price)*.28 unless you really get a ton of options and there’s huge fmv growth.
- benmanns 4y agoIt’s not options * strike price, it’s options * (fair market value - strike price), which is usually 0 at issue and is $$$ if you exercise and sell after an IPO (or after subsequent funding rounds/revenue growth which bumps up FMV).
- dilyevsky 4y agoEr botched the formula you’re correct
- psanford 4y agoYou can claim the AMT credit in the future tax years.
- deleted 4y ago[deleted]
- buck4roo 4y agoCorrect me if I'm wrong, but I recall this AMT overpayment credit could only be used up at rate of $3k/year and only in years where you also owed AMT?
- psanford 4y agoHere's the relevant code. It sounds like your understanding doesn't match the current rules (consult a tax professional): https://www.law.cornell.edu/uscode/text/26/53 https://www.law.cornell.edu/uscode/text/26/53