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Mark Taylor
Mark Taylor, Certified Public Accountant
Category: Capital Gains and Losses
Satisfied Customers: 971
Experience:  Certified Public Accountant
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The start-up company I'm working for is getting ready to

Customer Question

The start-up company I'm working for is getting ready to sell at a profit to a larger company. When the company is sold there will be an option to roll over employee stock from my current company to the acquiring company. I have ISO shares of stock that haven't been exercised for longer than a year so I will be paying short term gains taxes on them. I'm wondering if I can avoid paying short term capital gains taxes if I roll my shares to the new company and hold for a year before selling.
Submitted: 4 months ago.
Category: Capital Gains and Losses
Expert:  Mark Taylor replied 4 months ago.

Hi, my name is Mark. I will be happy to help you with your questions.

Expert:  Mark Taylor replied 4 months ago.

So your company is being acquired?

Customer: replied 4 months ago.
in the near future it will be acquired.
Expert:  Mark Taylor replied 4 months ago.

Ok, I am checking on this. I do not believe there is any way to avoid the short term gain but let me verify this.

Customer: replied 4 months ago.
Thanks
Expert:  Mark Taylor replied 4 months ago.

Do you know if the acquisition is considered a tax free reorganization?

Customer: replied 4 months ago.
I'm not sure. I can ask.
Expert:  Mark Taylor replied 4 months ago.

If it is a tax free reorganization you would avoid short term gains by rolling the shares into the new company. If it is not a tax free reorganization then rolling the shares into the new company would be considered a disposition of the old shares and a taxable event.

Expert:  Mark Taylor replied 4 months ago.

Usually companies are very good at providing employees with information about their option and the effects of their choices.

Expert:  Mark Taylor replied 4 months ago.

I hope you found this information to be beneficial. If this answered your question please take a few moments to rate my response. A rating is needed in order for me to receive credit for helping you today. The rating bar is located at the top of the page – ranging from 1 to 5 stars. If you need me to clarify aspect of my response or if there are additional areas of the question that you would like me to consider please let me know. I would be happy to continue the discussion. It has been my pleasure helping you today.

Expert:  Mark Taylor replied 4 months ago.

Please let me know if you have any questions or need clarification. I am happy to help.

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