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Timing is Everything in Early ISO Exercise

How early is too early to exercise? If it were possible to exercise pre-vested incentive stock options, imagine the tax savings. One of the big concerns for those facing a wealth event in private company stock is taxes. Timing is everything in exercising stock options.  If you manage your company’s equity plan, you need to know about early exercise of Incentive Stock Options.

Early exercise of ISOs refers to the potential to exercise unvested options. Many private companies allow employees to exercise their incentive stock options prior to the company’s public offering (IPO).  You would employ early ISO exercise in order to lock in a lower pre-IPO price, minimize ordinary income taxes and start the capital gains period running in the pre-IPO period.

Early ISO exercise is a well-kept secret, as well as the benefits and conditions and which employees are eligible. That’s where well-informed stock administrators can help. Watch the Certent webinar, Timing is Everything, Early ISO Exercise: Pre-Vest, Private Company, provided through a partnership between Certent and SFG Wealth Planning Services and hear two CEP professionals: Certent’s Don Gillotti and SFG’s Chuck Steege, dive into the details.

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