4 ms·
Yeah, pretty irresponsible for an article that says "all you need to know". You absolutely need to know the ins and outs of this if you have a significant numb
by dasil003 13y ago
Yeah, pretty irresponsible for an article that says "all you need to know". You absolutely need to know the ins and outs of this if you have a significant number of options on a company with an increasing FMV. You own AMT on the paper gains between your strike price and the current FMV. However this only applies if you don't sell the shares. If you sell the shares before the end of the calendar year then the AMT calculation is nullified and you just pay taxes on your actual gains.
In a dotcom bubble scenario this can make the difference between owing millions of dollars of taxes despite having never seen a dime and owing your standard income tax on actual profits.
- barretts 13y agoThat's a fair point, I didn't really take AMT into account. Feel free to leave a comment on the post, it's useful information.
- cubes 13y agoWait, what? You didn't take AMT into account? Because I have colleagues that AMT has nearly bankrupted, and who spent years having their wages garnished by the IRS because of it. Feel free to edit your post so as not to send people to the poor house.
- textminer 13y agoIt can be hard to sell those shares when there's no market, no? I recently left a small startup in which the AMT hit would've been $26k, with no possible way to recoup that from selling the shares themselves (outside of a scheme like the ESO Fund, which issues non-recourse loans on the upside of a stock option sell, covering you for the tax and exercise costs.)