Create a plan for stock at work review

Lesson in Course: Ambition reviews (beginner, 5min)

Part 3 of Use stock at work

Exercising our right to buy shares

 If we are planning to sell our shares, we must first exercise our options. However, exercising our stock options can be risky.


Exercising early

Early exercising means that we execute our right to purchase stock in the company even before we own them. To early exercise, we need to file an 83(b) election with the IRS.


NSO exercise and sales tax

When we exercise our NSOs, it will look like we made income to the IRS regardless of whether we can sell the shares for cash. 


ISO exercise and sales tax

ISOs have tax incentives baked in; however, they also have requirements for their tax advantages. If we meet these requirements, our equity is considered a qualified disposition. Failing to meet the requirements results in a disqualification for the incentives.