Why I will not exercise my Gitlab stock options (2017) • Hacker News Board

Re: Why I will not exercise my Gitlab stock options (2017)

#11

Post by moneywoes » Thu, Oct 14, 2021, 10:09 PM UTC

tr3ntg wrote: post #8

abdabab wrote: post #2

This is a little sad. That was 1.5 million dollars of vested share for the price of $4050 + taxes.

Yeah, but those taxes are based on the value of the shares today ($1.5m) minus what it'll cost him ($4k). Even though he's not actually profiting on that difference yet, you still usually owe taxes on it. So we're talking hundreds of thousands of dollars in taxes. It's no small thing.

Sorry dumb question but when would he owe those taxes? At the end of the year?

Re: Why I will not exercise my Gitlab stock options (2017)

#12

Post by moneywoes » Thu, Oct 14, 2021, 10:09 PM UTC

tr3ntg wrote: post #8

abdabab wrote: post #2

This is a little sad. That was 1.5 million dollars of vested share for the price of $4050 + taxes.

Yeah, but those taxes are based on the value of the shares today ($1.5m) minus what it'll cost him ($4k). Even though he's not actually profiting on that difference yet, you still usually owe taxes on it. So we're talking hundreds of thousands of dollars in taxes. It's no small thing.

Would they be long term capital gains in this situation?

Re: Why I will not exercise my Gitlab stock options (2017)

#13

Post by caffeine » Thu, Oct 14, 2021, 10:17 PM UTC

> I would even prefer to buy Bitcoins for that amount, than to invest it in GitLab.

Hope he bought the BTC!

Re: Why I will not exercise my Gitlab stock options (2017)

#14

Post by booblik » Fri, Oct 15, 2021, 12:14 PM UTC

tr3ntg wrote: post #8

abdabab wrote: post #2

This is a little sad. That was 1.5 million dollars of vested share for the price of $4050 + taxes.

Yeah, but those taxes are based on the value of the shares today ($1.5m) minus what it'll cost him ($4k). Even though he's not actually profiting on that difference yet, you still usually owe taxes on it. So we're talking hundreds of thousands of dollars in taxes. It's no small thing.

LOL, no, taxes on today’s valuation are only due when you sell. And that would be very low long term capital gains tax. Albeit in this case the writer is not American so the tax situation might differ.