It is absolutely not true that there is no tax liability when you exercise your shares, at least for commonly granted ISO stock options. Here's a site on it:

It is absolutely not true that there is no tax liability when you exercise your shares, at least for commonly granted ISO stock options. Here's a site on it: http://fairmark.com/execcomp/isoexer.htm http://fairmark.com/execcomp/isoexer.htm Basically, there's no "regular" tax liability, but the difference between the exercise price and the market price at time of exercise counts as income for AMT, and so have a great day, you're gonna pay AMT that year if you do this for any significant quantity of stock.