
The New 83(i) Election – Defer Tax on Your Stock Options - brackin
https://blog.visor.com/equity/83i-election/
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zaroth
The one question in my mind the whole time which the article doesn't answer,
is if you exercise options and buy unregistered stock with has a current FMV
in excess of the strike price--a taxable gain--but then within the 5 year
deferral period the company dissolves in a puff of smoke, making the stock you
hold actually worthless... do you still owe the tax?

Seems to me that a key advantage of the deferral period would be if it allowed
one to net out the true capital gain/loss if you actually sold or otherwise
disposed of (e.g. it became worthless) the stock within the deferral period.

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magnetic
What is the rationale for adding another rule to the tax game? It seems
complicated enough already, and I thought we were trying to simplify it?

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zwily
On the surface, this seems like a welcome addition. Given how long companies
are waiting to IPO these days, 5 years may not be enough though...

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gautamnarula
This is definitely much more preferable to the typical 90 day window + pay the
tax this year scenario. Even if the company does not go public, the employee
at least now has five years to come up with the money to pay the tax bill. If
you are fortunate enough to work at a company that offers a longer exercise
period (e.g., Quora and Pinterest are two I can think of offhand that offer 7+
years to exercise your options), then you've got over a decade of time--unless
I'm misunderstanding the bill.

Is it possible to "un-exercise" your ISOs? If so, that also gives employees
five more years to watch the company trajectory and make a more informed and
measured decision -- if they lose confidence in the company, they can return
the ISOs to the employer instead of paying an upfront tax bill on what is
still somewhat of a lottery ticket.

