Hi,
I am likely looking to leave (within the next few weeks) the startup I am currently working for, and go to one of the top 4 for several reasons (there is a related thread I wrote, if you care about this in more details: http://ift.tt/2omWu41).
(Un)fortunately, the startup appreciated considerably since I joined 3 years ago, and now the cost of exercising my options + AMT tax would be around $~110k (I calculated the value manually and also used TurboTax to simulate the transaction, it turns out $~40k for exercising + $~70k for AMT).
Now, on top of this insane amount of money that I have to pay out of pocket, there is even a bigger problem: The math I've done for the taxes is based on the 409A valuation of the company done at the last round of funding (Series B) a year ago (it's still the official number HR provided me). I have reasons to believe a Series C will be imminent (i.e. a month or two away).
The question I have is: if I leave, say, two weeks from now, and write a check for $40k to the HR department for exercising my vested options, can I use the check date as "exercise" date, meaning that I'll be sure the valuation for AMT purposes will still be the one of the Series B? Or will I have to wait until the board & lawyers approve the whole thing, which could mean the FMV will likely have increased by then because of the Series C (and I will be effectively screwed, because the AMT tax portion would be much larger?).
In other words, would this timeline work?
- (April 2017) I leave the company and pay $40k for exercising
- (May 2017) The company raises the Series C, increasing its value
- (June/July 2017) Lawyers/board process my exercise and send me the certificate saying I am a stock owner
- (at some point between August 2017 and April 2018) I pay $70k to IRS, even if the FMV is increased
Goes without saying that I will talk to a CPA experienced in those things before proceeding with the exercise, but I just don't have one right now and the people in this subreddit seem to know so much :)
Thank you
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April 04, 2017 at 12:07AM
http://ift.tt/2n4wltT
from /u/malloc33
http://ift.tt/2n4wltT
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