Are private company incentive stock options taxed?

February 14, 2005

Date:   Tue, 01 Feb 2005
From:   Anonymous

We made a cashless exercise of a private company, and received a 1099 for $46,000. The company isn’t publicly traded. The exercise price was $2 per share.

How can this be possible? We only exercised because the option was expiring. If I am taxed on the $46,000, they can have the stock back.


Date:   Wed, 09 Feb 2005


You should have gotten advice about the consequences of exercising the option. Ask the company if you can rescind the transaction. Bear in mind you are giving up an asset that could be of value if the company goes public or is sold.

Good luck!

Mike Gray

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options – Executive Tax and Financial Planning Strategies.

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