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You should understand the tax (particularly AMT) implications of exercising. $20k cost to exercise. $300k to Uncle Sam (given your 50x increase).
by scurvy 11y ago
You should understand the tax (particularly AMT) implications of exercising. $20k cost to exercise. $300k to Uncle Sam (given your 50x increase).
- 7Figures2Commas 11y agoYou should understand that every situation is different. Are you talking about NSOs, or ISOs? Have you factored in the minimum tax credit? Very few articles on ISOs and AMT highlight the minimum tax credit that is applied when the amount paid under AMT exceeds what would otherwise have been paid.
- scurvy 11y agoYou still need to pay your taxes in one year to claim it as a credit in a successive year. Uncle Sam and California don't take kindly to IOU's (nor does your credit score). What if you exercise a little every year, triggering AMT each year? No credit for you and the credit is reduced the older it gets. Like you said, each situation is different, but most people are going to pay a boatload in taxes on this and not be able to claim it as a credit later on.