From pre-IPO grants to founder exits, Capital Tax helps high-income individuals and executives navigate the complex tax landscape of equity compensation minimizing liability at every stage.
100% confidential · No spam
Equity compensation, including stock options, RSUs, ISOs, and founder shares, is a powerful tool for building wealth. However, it comes with one of the most complex and tax-sensitive aspects of personal finance. The wrong tax decisions or lack of planning can lead to significant liabilities, while strategic planning can save you hundreds of thousands in taxes.
The desire to reward employees and founders with equity is important, but managing the tax implications of equity awards is a constant challenge — regulatory complexity is always evolving and varies significantly by state and individual circumstances.
For equity compensation to deliver maximum after-tax value, decisions must be made proactively, built on a sound understanding of the tax code, and well-timed to capture available elections and exclusions.
Common challenges include:
Each service is a deep-dive into a specific equity tax challenge with tailored strategies for your situation.
Filing an 83(b) election within 30 days of a restricted stock grant can lock in a low tax basis and eliminate tax on future appreciation. Miss the window and you could owe ordinary income tax on vesting potentially at peak value.
Qualified Small Business Stock can allow you to exclude up to $10M (or 10× your basis) in capital gains from federal tax. We help founders and early investors qualify, structure, and maximize the exclusion before an exit.
California taxes deferred compensation and equity vested while you were a resident even after you move. Our strategists help you understand your exposure, time your departure correctly, and document your domicile change.
Exercising Incentive Stock Options can trigger the Alternative Minimum Tax sometimes catastrophically. We model your AMT exposure and create an exercise strategy that captures appreciation while keeping your tax bill manageable.
The period before an IPO is when tax planning matters most. From secondary sales and tender offers to understanding your equity package, we help you make informed decisions before the lockup clock starts ticking.
Renouncing U.S. citizenship or long-term residency triggers a mark-to-market exit tax on your worldwide assets. We guide covered expatriates through the process, minimizing the tax cost of leaving the U.S. tax system permanently.
Not sure which service applies to your situation? Our advisors will help you find the right path.
Tax-efficient equity planning is proactive, not reactive. Here’s how we engage.
We understand your equity grants, vesting schedule, residency, and financial goals.
We align RSUs, ISOs, and NSOs with income and timing to reduce tax drag and bring precision to complex compensation.
We prepare returns with precision across RSUs, ISOs, and NSOs—ensuring accurate reporting, AMT alignment, and complete capture of all equity-related tax implications.
We model forward-looking scenarios and present clear projections—so decisions around equity, income, and timing are made with confidence, not guesswork.
Want to learn more about how to optimize your stock options or RSUs? Our experts can guide you through strategies like 83(b) elections, QSBS, and AMT planning to ensure you’re on the path to maximum tax efficiency.
An 83(b) election lets you pay income tax on restricted stock at its current low value instead of at vesting when it may be worth far more. You must file it within 30 days of receiving the grant. Missing this window can cost founders and early employees hundreds of thousands in avoidable taxes.
When you exercise Incentive Stock Options (ISOs), the spread between the exercise price and fair market value is treated as a preference item under AMT rules. This can trigger a large tax bill in the year of exercise — even if you have not sold any shares. Proper planning around how many ISOs to exercise per year is critical to avoiding an AMT surprise.
Yes. California taxes equity compensation based on where you were a resident during the vesting period. If your stock options or RSUs vested while you lived in California, the state can claim its share of those gains even after you have relocated. Planning your move carefully — including timing and documentation — is essential to limiting this exposure.
Qualified Small Business Stock (QSBS) under Section 1202 allows eligible shareholders to exclude up to $10 million or 10 times their cost basis in capital gains from federal tax. To qualify, the stock must be in a domestic C-corp with gross assets under $50 million at the time of issuance, and you must have held it for more than five years. Proper structuring from day one determines whether you qualify.
The earlier the better. Many of the most valuable tax strategies — like the 83(b) election, early QSBS qualification, and ISO exercise planning — have strict time windows or require action well before a liquidity event. Waiting until a funding round, IPO, or acquisition is often too late to capture the full benefit. We recommend engaging an advisor at the time of grant or hire.
Disclaimer: This is not tax advice, and it is recommended to consult a tax professional, as every tax situation is unique.
