Stock Option Planning (ISO’s and NSO’s)

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Senior level executives who work for corporations are often granted stock options as an attraction and retention tool by their employer. Stock options can offer a large wealth accumulation opportunity, although the tax treatment of these instruments can be tricky because the alternative minimum tax (AMT) is easily triggered. What we often see is executives are good at accumulating stock options but end up with too much of their wealth tied to a single company who is also the solo source of their income. This lack of diversification and the potential tax time-bomb catches many executives by surprise as they approach retirement because they were too busy with their incredibly heavy work responsibilities. A licensed tax professional/financial planner who is deeply ingrained with their overall financial plan is needed to guide the executive through the accumulation and diversification process.