> So? Why should taxes be paid unless there are actual gains? What's the problem with waiting until gains are realized to tax them?
Exactly. And what the article or the linked Bill summary fails to make clear (unless I missed it) is whether the tax amount is based on the value of the stock the day the options are exercised, or when the tax is paid. By the time the stock becomes liquid, it might be worth far less than that it was when the options were when the options were exercised. Maybe far less than the actual tax bill. And what happens if the stock's value goes to zero?
I'm with you on this. I don't see why they can't tax this like any other stock trade, where you pay tax on the actual monetary gain, after it has been realized.
Exactly. And what the article or the linked Bill summary fails to make clear (unless I missed it) is whether the tax amount is based on the value of the stock the day the options are exercised, or when the tax is paid. By the time the stock becomes liquid, it might be worth far less than that it was when the options were when the options were exercised. Maybe far less than the actual tax bill. And what happens if the stock's value goes to zero?
I'm with you on this. I don't see why they can't tax this like any other stock trade, where you pay tax on the actual monetary gain, after it has been realized.