Road Map ISO - Incentive Stock Options

Framework
ISO Comp
Roadmap

What We Do

1

Stage I (difficult as is)

  • Needs request and possible manual adjustments
  • Accurate planning, documentation, tax returns
  • Check company issued tax documents for accuracy
  • Review any prior tax returns
  • Tracking of AMT credit, basis, needs
2

Explain (value add II)

  • Function of ISOs and reporting accuracy
  • Any Qualified Small Business stock (SS 1202) if applicable
  • What is the typical benefit of LTCG via 2G1E and is it worth it for you?
  • AMT adjustment and AMT credits
  • AMT basis and triggering AMT credits from prior years
  • AMT projections and non-linear nature of the tax calcuation
3

Deliverables possible (value add III)

  • Look for easy wins before projections or multi-stage projections
  • Project our baseline, exercise to AMT trigger, exercise with AMT
  • Action or no-action deliverable - Exercise, Sell, Hold, Do Nothing
  • Complication add if high dollar amount with liquidity
  • Complication add with high unexercised appreciation without liquidity
  • Complication add if plans to leave job

How We Do It

1

Client call

  • Confirm fit and document general ISO profile
  • Preliminary value adds and G.CPA Appoach
  • Basic timelines, billing explanation, and estimate
2

Onboarding and Needs

  • Admin (retainer and engagement)
  • Basic needs list
  • Set first appointment
3

ISO Facts

  • Document ISO holdings (cost, ex price, key dates)
  • Any possible Qualified Small Business Stock?
  • Vest dates and exercise requirements if leave the job
  • Liquidity now or in the future
4

Valuation and estimates

  • 409a valuation estimates and timeline
  • Current and future stock price estimates
  • Time want to spend at the company
5

Budget and desires

  • Discuss general budget for exercise and possible taxes
  • Ability to have liquidity if no dates are set known
  • Are the tax savings worth it to you all things considered?
6

Deliverables and Projections

  • Baseline no exercise ISO
  • Exercise to AMT trigger point ISO
  • Exercise ISO with fed AMT and possible CA AMT
  • Exercise and or sell ISO shares
  • All of the above
7

Explanation

  • All of the above
8

Action or no action

  • Client determines final action or no action. All questions satisfied.