ABCDEFGHIJKLMNOPQRSTUVWXYZ
1
2
Private Shares Cash Flow Implications
3
4
Inputs
5
Tax Bracket (1)
6
Filings StatusSingle Filer
7
Adjusted Gross Income
$150,000
8
Capital Gains Tax Rate (Based on 2019 Tax Brackets)
15%
9
Marginal Ordinary Income Tax Rate (Based on 2019 Tax Brackets)
24%
10
11
Option Details
12
ISO or NSO?ISO
13
Number of Options Granted
 100,000
14
Exercise Price per Share
$1.00
15
16
Voluntary Elections
17
83(i) Election? (Must be "No" if 83(b) Election was Previously Taken)
No
18
19
Key Dates
20
Option Exercise Date (Can Be Prior to Vesting Date if You Have Early Exercise Rights; Must File 83(b) to Receive Tax Benefits)
1/1/2018
21
Option Sale Date
1/1/2020
22
23
Value per Share
24
Fair Market Value per Share at Time of Grant
$1.00
25
Fair Market Value per Share at Time of Exercise (Must be Above Grant FMV)
$2.00
26
Sale Price per Share at Time of Sale
$3.00
27
28
Cash Flow Implications
29
Time of Option Exercise
30
Cash Outlay to Exercise Options
($100,000)
31
Cash Outlay for Taxes Due on Exercise (1)
$0
32
Net Cash Flow for Employee
($100,000)
33
34
Time of Share Sale (2)
35
Cash Proceeds from Sale of Shares
$300,000
36
Cash Outlay for Taxes Due on Sale (1)
($30,000)
37
Cash Outlay for Deferred Taxes on Exercise (1)
$0
38
Net Cash Flow for Employee
$270,000
39
40
Cumulative Cash Flow (2)
41
Cash Proceeds from Sale of Shares
$300,000
42
Cash Outlay to Exercise Options
($100,000)
43
Cash Outlay for Taxes (1)
($30,000)
44
Net Cash Flow for Employee
$170,000
45
46
(1) Tax rates used for illustrative purposes; actual incremental taxes may vary based on amount of additional income earned and its effects on your tax bracket.
47
(2) Excludes potential tax benefits from recognized capital gains loses if sale price is lower than FMV at time of exercise.
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100