Was lucky to have my wife get in with a company who recently IPO'd. We have a few of the different types of options; ISO's, RSU's, NQSO's, and ESPP, some exercised some not. We're now at the point where we intend on selling some of them for our first big purchase. Really would just like some direction on which to sell first and the tax implications, as black and white as possible, which I know is near impossible to do. Was looking if anyone had a recommendation for an accountant/adviser (not sure which I should go to), or any general guidelines to follow in selling these. Long term capital gains vs short term, which of the 4 types should I hold the longest, should we prioritize selling one immediately.
Any advice or a personal recommendation would be greatly appreciated.
Thanks in advance.
ISO you'll have a choice of cashless exercise (pay tax now) or exercise and hold (subjected to possible AMT taxes or even net investment income tax).
The question depends all on whether you think your wife's company is going to grow or fall. Many companies IPO and skyrocket or many IPOs just tank (ie biotechs).
Since the new tax bill is raising the limits on the AMT taxes, you may want to consider exercise and hold if you think the company is going to grow. Otherwise cashless exercise is the best option.
Look at the RSU in the SPD. Some RSU have taxes taken out already and the stock is given at a net rate. You might want to consider that route if its for quick cash.
ESPP is a purchase plan that offers at a discounted rate. Again it all depends on your belief of the company's future.