Tax Advantages
Taxable Events
Tax on the Bargain Element
Tax on the Sale of the Shares
Grant Date
Grant Price of $5
Exercise Date
Stock price of $15. Income Tax is paid on the $10 difference.
Sell Date < 1 Year
Short-Term Capital Gains Tax is paid on the current Fair Market Value of $20 minus the $15 stock price at exercise.
Sell Date > 1 Year
Long-Term Capital Gains Tax is paid on the current Fair Market Value of $20 minus the $15 stock price at exercise.
Ways to Exercise Your Stock Options
Sell-to-Cover Exercise Strategy
Cashless Exercise
Disclosures
Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client’s portfolio. All investment strategies have the potential for profit or loss. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author/presenter as of the date of publication and are subject to change and do not constitute personalized investment advice.
A professional advisor should be consulted before implementing any investment strategy. WealthGen Advisors does not represent, warranty, or imply that the services or methods of analysis employed by the Firm can or will predict future results, successfully identify market tops or bottoms, or insulate clients from losses due to market corrections or declines. Investments are subject to market risks and potential loss of principal invested, and all investment strategies likewise have the potential for profit or loss. Past performance is no guarantee of future results.
Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s portfolio. There are also no assurances that any portfolio will match or outperform any particular benchmark. No content should be construed as an offer to buy or sell, or a solicitation of any offer to buy or sell any securities mentioned herein.