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If you were granted ISOs (you were an employee and it is still within 90 days from your departure) and they are still available to you as such, exercise them as long as you're comfortable with the risk.

Despite the parent comment, unrealized earnings on the exercise of ISOs are not taxed as income.

They are not taxed as income but are subject to AMT, so can absolutely leave you with a large tax burden if you aren't cautious.


If it's a "token amount", then that's probably unlikely unless you have other large deductions (ex: mortgage, property tax)

It can be quite large too. However, you can recover that money a few $k at a time over the next several years if you are not subject to AMT (and don't sell the shares). Granted you will have to pay the taxes again when you sell the shares, but at that point it's capital gains (15%) so if it's a long term prospect it may well make sense.

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