If Wikipedia.com were a private company how much would it be worth?

How much will I net after taxes for selling shares in a private company?

• I have 500,000 options in a private company. Half of my options were granted as part of the Company's ESOP, and the other half were granted for services provided after I left the company (not through ESOP). If my strike price is 1 dollar per share for both types of options, and I have an offer to sell them all at 1.50 dollars per share, how much will I net after taxes for each set of 250,000 shares?

• Answer:

  It depends on factors that are specific to your full financial situation and not something that I can (or would, to be honest) readily answer on Quora; this is a question that should be discussed with your personal tax advisor (and in this case you should have one).   The information provided in the question suggests that these options are nonqualified stock options (NSOs). Although ESOPs normally provide statutory stock options, for the option to be a statutory stock option it must be exercised by the employee no later than three months after the date of separation from the company. It sounds as though you have been separated from the company for longer than the three-month period required. Most company plans do not permit the employee to transfer options granted under an ESOP (of either kind) except in the case of death or gift to a family manner - so I assume that you are talking about exercising the options and then selling the stock. If your options are NSOs, you will realize ordinary income, taxed at your normal rate based on your other income, on the difference between the exercise price and the FMV of the stock at the time of exercise. Your basis in the stock is the price that you paid for it plus the income that you realize on the exercise of the option. If you then sell the stock for 1.50 a share, you will realize capital gain or loss, in addition to the income from the exercise, based on the difference between the FMV of the stock at exercise and the 1.50 per share price. If your adjusted gross income exceeds the threshold for your filing status, and you realize net capital gain, you will also be subject to the http://www.irs.gov/uac/Newsroom/Net-Investment-Income-Tax-FAQs of 3.8% on your net investment income in addition to whatever base rate applies to your capital gain. If your options are statutory stock options, on the other hand, and you don't hold the stock for more than one year after exercise and more than two years after the grant date, the tax treatment is the same as though it were an NSO. If you dispose of the stock in a year after the year in which you exercised the option, you will also have to include the spread between the exercise price and the FMV of the stock at the time of exercise as income in the year of the exercise for the purpose of computing . If you have held the stock (not the option, but the stock) for more than one year after exercise and more than two years after the grant date, then you treat the entire sale as capital gain, and apply the appropriate capital gain rate plus the 3.8% NIIT as required to your overall net capital gain. And that's just the US federal tax treatment. State tax treatment is something else again.