Exercise and taxation of ISO options

Original link: https://nyan.im/p/iso-stock-option

Disclaimer: This article is for sharing only and does not constitute any investment or tax advice. Investment income and AMT taxation are complex, and if you are a stakeholder, be sure to take the time to do your own research or consult an accountant.

Some time ago, I received the first 1/4 of stock options after I worked at the company for a full year. I did some research on what to do with these options.

Compared with the RSU (Restricted Stock Unit) granted by a listed company or a PreIPO company, Stock Options has greater potential benefits and higher risks. Most full-time employees get ISO (Incentive Stock Options) options, another option is NSO (Non-Qualified Stock Option) This article will not discuss.

While ISO options have some tax advantages, they also create significant tax risks. Simply put, ISO options can get you a lot of money, or a (bought) pile of scrap paper, or in a worst-case scenario, you can go bankrupt because of taxes. Maximizing returns while avoiding risk requires early planning and careful action.

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