How can I pay taxes on non-qualified stock options in a private company?
May 29, 2002
Subject: Non-qualified stock options in private company
Date: Tue, 18 Dec 2001
Hello! I have a NQSO question for you. I’ve been browsing the internet for information on NQSOs and the tax consequences, however I have yet to find a similar situation to mine. I have a large number of stock options that will be expiring next year. I don’t have the cash to pay the taxes on the gains even at the current prices (FMV) and since the stock is in a private company, the shares are restricted so I can’t just liquidate an amount to pay the taxes. Any advice?
If you don’t have the cash to pay the taxes, maybe it’s best to pass on exercising the options.
Despite the “upside” potential, I don’t think it’s wise to put yourself in financial distress for this “benefit”.