Startup America: How To Make Life Better For Startups (Installment 3)

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This is part of a series, directed at those individuals involved in President Obama’s Startup America initiative. The task is this – write about what the President and Congress can do to make life better for startup companies, by making the law simpler, less complex, easier to understand, and better for startups.

Today’s topic–the alternative minimum tax on incentive stock options (ISOs).

If you are not aware, ISOs are supposed to be a good deal. If you receive an ISO, you don’t have tax on receipt, and you don’t have ordinary income on the exercise of the ISO even if the fair market value of the underlying stock exceeds the exercise price. In addition, if you hold the stock for at least 1 year from exercise and at least 2 years from the date you received the option, your gain on sale will be capital gain, not ordinary income.

Please see full article below for more information.

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Davis Wright Tremaine LLP on:

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