What date is considered the exercise date?
June 3, 2002
Subject: ISO Questions
Date: Sun, 16 Dec 2001
I have a couple of questions regarding ISO’s that I have to exercise by January 5 2002.
- Should I exercise in 2001 or 2002.
- What date is considered the exercise date for tax purposes? The date of the check. The date the check is cashed. The date received. Other?
- How do I determine the fair market value? Is it the current option grant price, the latest round of financing share price(which was for preferred shares)? Other?
One of my concerns is AMT. Although I am not sure if I will be affected by it.
Date: 26 Dec 2001
I really don’t have enough information to give you advice.
Ask your company what the fair market value of the shares will be reported to be. They should know.
The exercise date is the date you notify the company that you want to exercise the option. You can “settle up” after that date.
You will probably be better off exercising during January, 2002. Then you can decide by December 31, 2002 whether you would be better off selling the stock before the end of the year.