4 ms·

No, not at all. You're taxed on equity at fair market value when it vests. It's only after that when you get taxed at a lower rate on the capital gains.

Someone1234 7mo ago
[flagged]
- option 7mo ago
  What do you think happens with loans?
  - Someone1234 7mo ago
    That they pay interest at a lower relative rate than the cost of the taxes that would be due, what do you think happens with the loans?
- philipallstar 7mo ago
  Those share options need excising, which probably incurs income tax on the allocation Vs strike price. Then the shares are only worth something to inheritors if that company is doing useful work for its customers over an extremely long period of time. That is likely far more valuable than the tax going towards paying off the interest for a year on some vote-buying spending that happened 20 years prior.
- jcheng 7mo ago
  You're thinking of realized capital gains, not tax on the exercise/grant. I don't think there is a way to dodge the latter, and you can't take out a loan or pass down options you never exercised or stocks you were never granted.
- compiler-guy 7mo ago
  You should probably read the filing. First, these aren’t options, it is straight up stock and it does vest. Second, even if they were options, they definitely vest, otherwise Pichai would never gain control to be able to use them as collateral for a loan. What you might be thinking is that they never get exercised, which is when the person uses the option to actually buy the share. But even that isn’t as straightforward as you seem to be making it out to be. The money to actually pay the interest on those loans and that is usually done by selling stock acquired this way. And then that income is almost certainly subject to AMT as well as other special taxes in California.
rawgabbit 7mo ago
This seems to say the opposite. If your employer grants you a statutory stock option, you generally don't include any amount in your gross income when you receive or exercise the option https://www.irs.gov/taxtopics/tc427 https://www.irs.gov/taxtopics/tc427
- compiler-guy 7mo ago
  Sundar's stock is not in the form of options, so this explanation is irrelevant.
- deleted 7mo ago
  [deleted]
- s1artibartfast 7mo ago
  The IRS page refers to Incentive Stock Options (ISOs) as "statutory" options. These are the "holy grail" because they allow you to avoid income tax at exercise and only pay capital gains when you sell. ISOs have a 100k cap per year. Further, the next line after your exceprt is "However, you may be subject to alternative minimum tax in the year you exercise an ISO", which is an income tax

Someone1234 7mo ago

[flagged]

option 7mo ago
What do you think happens with loans?
- Someone1234 7mo ago
  That they pay interest at a lower relative rate than the cost of the taxes that would be due, what do you think happens with the loans?
philipallstar 7mo ago
Those share options need excising, which probably incurs income tax on the allocation Vs strike price. Then the shares are only worth something to inheritors if that company is doing useful work for its customers over an extremely long period of time. That is likely far more valuable than the tax going towards paying off the interest for a year on some vote-buying spending that happened 20 years prior.
jcheng 7mo ago
You're thinking of realized capital gains, not tax on the exercise/grant. I don't think there is a way to dodge the latter, and you can't take out a loan or pass down options you never exercised or stocks you were never granted.
compiler-guy 7mo ago
You should probably read the filing. First, these aren’t options, it is straight up stock and it does vest. Second, even if they were options, they definitely vest, otherwise Pichai would never gain control to be able to use them as collateral for a loan. What you might be thinking is that they never get exercised, which is when the person uses the option to actually buy the share. But even that isn’t as straightforward as you seem to be making it out to be. The money to actually pay the interest on those loans and that is usually done by selling stock acquired this way. And then that income is almost certainly subject to AMT as well as other special taxes in California.

rawgabbit 7mo ago

This seems to say the opposite. If your employer grants you a statutory stock option, you generally don't include any amount in your gross income when you receive or exercise the option https://www.irs.gov/taxtopics/tc427 https://www.irs.gov/taxtopics/tc427

compiler-guy 7mo ago
Sundar's stock is not in the form of options, so this explanation is irrelevant.
deleted 7mo ago
[deleted]
s1artibartfast 7mo ago
The IRS page refers to Incentive Stock Options (ISOs) as "statutory" options. These are the "holy grail" because they allow you to avoid income tax at exercise and only pay capital gains when you sell. ISOs have a 100k cap per year. Further, the next line after your exceprt is "However, you may be subject to alternative minimum tax in the year you exercise an ISO", which is an income tax