4 ms·
> If the value is high enough the employee might be subject to alternative minimum tax (AMT) I've never run the numbers, but my impression is that the AMT leve
by mtviewdave 12y ago
> If the value is high enough the employee might be subject to alternative minimum tax (AMT)
I've never run the numbers, but my impression is that the AMT level is low enough that AMT will be triggered for any exercise where the number and value of options is meaningful.
>but the possibility of paying no tax is a benefit over NSOs whose gain is taxed as regular income and is subject to tax withholding.
It's not "no tax". It's "deferred tax". But again, in the real world of 6-figure salaries and big mortgage interest deductions in Silicon Valley, the deferral is probably mostly theoretical. Whereas the time limits on ISOs are real and unavoidable.
- ssorallen 12y agoGood point, "deferred tax" is more appropriate there. "No tax" is misleading. You might be able to stay out of AMT by splitting ISO exercises across multiple tax years, but that's splitting hairs. You make a good point that this discussion is most interesting in cases where you'd likely be in AMT anyway.