Daniel Zajac, CFP®

Incentive Stock Options and Executive Compensation

ISO

How to Use Alternative Minimum Tax Balancing to Manage Incentive Stock Option Cash Flow

Last Updated on by 1 Comment

If you have employee stock options, you need to determine what kind you have: incentive stock options (ISO) or non-qualified stock options (NQSO).

The differences go far beyond their names. ISOs may provide tax advantages for you, assuming you meet certain requirements. For this reason, many people prefer incentive stock options over NQSOs.

But with the tax advantages come increased complications. The rules around qualifying vs. disqualifying dispositions and the alternative minimum tax can make creating a strategy for your ISOs challenging to do.

What can help is understanding the ins and outs of these rules, how your cash flow may be impacted depending on what you choose to do, as well as tactics you can implement to make the most of your options while minimizing risk and making tax-smart decisions.

If you are looking for a solution that allows you to exercise and hold as many shares as possible and limit the cash call required, an AMT balancing strategy might be the best option for you.

How Qualifying Dispositions Work (and Where Alternative Minimum Tax Matters)

First, you need to understand what counts as a qualifying disposition. This occurs when you sell your ISO shares at least 1 year past the exercise date and 2 years past the date the shares were granted.

Selling incentive stock options this way allows you to pay long-term capital tax rates on any realized gains from the exercise price of the options to the final sale price. But while paying a lower tax rate may sound attractive, exercising and holding your ISOs for at least 1 year that may pose a potential cash-flow problem.

You need to consider how you’ll pay the tax due on the exercise and hold of your options, and you’ll also need to figure out how to pay for the exercise price of the stock shares.

The tax due that may be due is the alternative minimum tax, or AMT. The larger the spread between the exercise price of the ISO and the fair market value of the stock, the larger the potential for AMT.

It’s not uncommon for that spread to be so large that the subsequent tax bill exceeds the amount of cash you have on hand (or at least, requires a cash call much larger than the amount of cash you’d want to send off to the IRS).

One way to manage this potential cash flow problem is to plan an exercise, hold, and sell strategy that focuses on cash flow first. Doing so gives you a way to use AMT balancing when you exercise your ISOs.

The Potential Cash Flow Problem of an Incentive Stock Options Exercise

When you exercise and hold incentive stock options, you may be subject to AMT — and you will be subject to paying the cost to exercise and hold the shares. Let’s assume the following hypothetical scenario to see how much cash these moves could force you to use:

  • Amount of incentive stock options you can exercise: 10,000
  • The exercise price of your ISOs: $1.00 per share
  • Fair market value at exercise: $26.00
  • Alternative minimum tax rate: 26%

If you exercise and hold 10,000 ISOs, the bargain element is an AMT preference item; this is what you report when figuring if you owe AMT.

In our example, the bargain element is $250,000. If we assume a simple flax 26% AMT rate, that means you owe $65,000 in AMT.

In addition, you also need to pay for the shares of stock when you exercise and hold. In our example, this means paying another $10,000 ($1 per share multiplied by the 10,000 ISOs exercised).

Assuming these numbers, you’d pay a total of $75,000 to exercise and hold these stock options.

If you don’t have the cash on hand (and have it available to use for this specific purpose), you have a problem — but AMT balancing could help you solve it.

Using Alternative Minimum Tax Balancing to Solve the Cash Flow Problem with Exercising Incentive Stock Options

AMT balancing is a method that can help you cover the estimated cash required to pay AMT and for the shares you exercise by using some of the proceeds generated by exercising and then selling a portion of your ISO shares.

This means that, in lieu of an exercise and hold of 100% of your incentive stock options, you exercise and hold some ISOs while you exercise and sell some of the others.

The proceeds of the ISOs you sell can then be used to pay the tax bill and the cost to buy the shares. This is one of the biggest benefits of AMT balancing: you’ll end up holding a smaller position in company stock, but you’ll also reduce how much cash you need to pull out of pocket to cover the exercise transaction itself.

In addition to limiting or eliminating the amount of cash flow required to exercise and hold your ISO shares, AMT balancing can also help limit your exposure to a single company stock. The reduced position you’d most likely have (versus exercising and holding all your shares) may be a good thing if you are risk-averse, seeking to diversify your portfolio, or don’t want such a large amount of your net worth tied up in the same company that signs your paychecks.

Another benefit of AMT balancing is immediately realizing profits. Realized profit is something you don’t receive when you have ISOs that you exercise and hold. Holding shares means you continue to assume the risk/reward tradeoff associated with a single stock position, which may not align with your overall financial plan or investment strategy.

How Alternative Minimum Tax Balancing Works

Let’s go back to our example above to help illustrate how AMT balancing can work. We already established that the total cash necessary to pay the AMT and to exercise and hold your ISOs is $75,000.

If you used an AMT balancing strategy instead of exercising and holding all your shares, you’d need to ask, “How many ISOs need to be sold immediately after exercise to end up in a cash flow neutral position?”

To calculate the shares required, you divide the total cash you need to cover your expenses and taxes by the fair market value of the stock. (Note that this assumes that you exercise and sell the required ISO shares immediately.)

In our example, the number of shares required to be sold is:

Estimated Shares Required to be Sold = Cash Need / FMV of the Stock

$75,000 / $26.00

2,884 Shares (rounded down)

Total Proceeds from the Sale = $74,984

Post-sale, the $74,984 in proceeds can be used to pay the pending AMT bill as well as to cover the cost to buy the shares. This means that you will need to pay $16 out of pocket and that you will retain 7,116 shares post-transaction (the 10,000 ISO shares you started with, minus the 2,884 you sold to cover costs).

A Detailed Look at a More Complex Alternative Minimum Tax Balancing Scenario

Income tax rules for incentive stock options, the AMT, and compensation income tax rates will likely make a real-life scenario more complex to work through than the simplified example we used above.

In fact, as you exercise and hold some ISOs and exercise and sell others, you transition into a world that includes both AMT preference item reporting and compensation income reporting. This means that different tax rules will apply to different portions of the exercise transaction.

ISO shares that will be sold in a disqualifying disposition because they are exercised and sold rather than held will be subject to compensation income tax rates. In our example, 2,884 shares would be subject to this kind of tax treatment.

Meanwhile, the ISO shares that were exercised and held would be subject to AMT (assuming they are held past year-end). In our example, that’s 7,116 shares subject to AMT rates.

If we illustrate the qualifying and disqualifying disposition separately and show the cash flows from each transaction, we can see more clearly the cash flows required to exercise and hold the ISOs, the proceeds from the exercise and sale of the disqualifying disposition, and the AMT and compensation tax due:

Qualifying Disposition Disqualifying Disposition
Shares 7,116 2,884
Cost of Shares ($7,116) ($2,884)
AMT (26%) ($46,254) 0
Proceeds from Sale $0 $74,984
Compensation Income (24%) $0 ($17,304)
Net Cash Flows ($53,370) $54,796

By adding the net cash flows from the two portions of the transaction, you can see a positive total cash flow of $1,426. This is where AMT balancing can help you break even or even have a net cash flow, and not pay cash out of pocket

(It should also go without saying that you should complete a personal tax projection to determine how this strategy may work for you and what the exact figures may be. Using an expert who understands the complexities around equity compensation and how various parts of that compensation will be taxed can be extremely valuable.)

What AMT Balancing Means for Incentive Stock Options and Your Comprehensive Financial Plan

Much of the attention pertaining to incentive stock options address the AMT, AMT credits, and potentially preferential tax treatment. Unfortunately, these conversations may fail to address a similarly important part of the conversation: cash flow.

By giving attention to cash flow, you can begin to understand how your exercise decisions may impact you in the near term.

You need to know how much cash you will need to exercise and hold shares, whether or not you can actually afford a specific ISO strategy, and where the cash will come from if you’ll use it to exercise and hold shares.

By answering these questions, you can begin to implement a strategy that addresses your investment risk tolerance, your tax preference, and your ability to fund the plan per your other assets. Only then can you decide whether an AMT balancing strategy is in your best interest.

The content herein is for illustrative purposes only and does not attempt to predict actual results of any particular investment.   Diversification does not guarantee a profit or protect against a loss.  None of the information in this document should be considered as tax advice.  You should consult your tax advisor for information concerning your individual situation.  Tax services are not offered through, or supervised by, The Lincoln Investment Companies.

Planning for Incentive Stock Options: How Exercising ISOs Could Impact Your Cash Flow

Last Updated on by Leave a Comment

Before you do anything with your incentive stock options, you need to get clear on how exercising those ISOs could affect your assets and what will it cost you in terms of real money.

You need to know the cost of exercising your options, for example, or what you might pay in alternative minimum tax. And perhaps more importantly, you need to know where the money to pay for the pending cost of your decision will come from.

Understanding your cash flow plays a big role in making the right choices with your ISOs. By strategizing appropriately around the reality of your cash flow, you may be able to better time and plan for whatever exercise strategy you may be considering.

A Simple Look at How Exercising Incentive Stock Options Can Impact Your Cash Flow

When you exercise incentive stock options, you generally need to address two cash calls. The first is when you need to pay the exercise cost for your options. The second is when you pay the alternative minimum tax.

To calculate the required cash necessary to exercise your incentive stock options, you can multiply the number of shares you will exercise by the exercise price of your ISOs.

Calculating the cash necessary to pay the expected alternative minimum tax is more complicated. For purposes of this article, we can simplify this if we assume a flat AMT rate of 28% for all of our examples. (But if you’d like to learn more about AMT specifically, start here.)

If we assume an AMT rate of 28%, you can multiply that by the bargain element to calculate your estimated cost, and therefore the amount of cash required to pay alternative minimum tax.

Your bargain element is:

(Number of Shares Exercised) x (Fair Market Value at Exercise – Exercise Price)

Calculating the Cash Necessary to Exercise Incentive Stock Options: A Specific Example

Let’s assume that you have 10,000 incentive stock options with an exercise price of $5 per share and a current fair market price (FMV) of $100 per share. You plan to exercise and hold the incentive stock options post-exercise with the goal of obtaining a qualifying disposition.

In this scenario, the total cash call required is equal to the exercise cost of the shares, plus the AMT you owe from the exercise. Here’s how to calculate your cost to exercise:

(Number of Options Exercised) x (Exercise Price Per Share)

10,000 x $5 = $50,000

You will need to put up $50,000 to buy your shares. Then you need to account for the taxes generated from your exercise. The AMT cost, in this example, would be:

(AMT Rate) x (Bargain Element)

28% x $950,000 = $266,000

This tells us that you would need $316,000 in cash on hand (which is the cost of your shares at $50,000 plus the $266,000 you owe in AMT) in order to cover all the costs associated with exercising your incentive stock options.

A Strategy to Cover the Cash Required to Exercise Incentive Stock Options

There are two potential problems that are most common when people want to exercise and hold incentive stock options. The total cash call necessary for this transaction may be either:

  1. So high that you cannot afford it.
  2. So high that you don’t want to afford it.

$316,000 is a lot of money to have lying around in cash, and many people aren’t in a position to drop this kind of money all at once. Even if you do have this much liquidity available, you still might have very good reasons to not spend it all at once on your options.

If you find yourself in either scenario, you could reduce the cash needed for the transaction by exercising and holding some shares, and exercising and selling others. In other words, you could  intentionally execute a disqualifying disposition.

This strategy uses the proceeds from the immediate exercise and sell to cover the total cost of the exercise and hold and the AMT that generates. Let’s go back to our example above to see how this works.

We know the total cost of an exercise and hold is $316,000. If you want to (A) exercise and hold as many shares as possible and (B) not use (or at least minimize) your own cash for the transaction, you will need to sell some of your options immediately via a cashless exercise.

In order to estimate how many options you need to sell in a cashless exercise, you can divide the total cash call necessary by the bargain element of the incentive stock option:

(Cash Call) / (Bargain Element) = Cashless Shares

$316,000/$95 = 3,327

This strategy suggests that you sell the 3,327 shares. That would generate (approximately) enough proceeds to cover the cash outlay required to hold the remaining 6,673 shares.

Checking the Cash Flow of an Estimated Cashless Exercise of ISO

This seems simple, but you still may need to do further analysis to determine if this makes sense for you — and to understand if you might need to put up some amount of cash even if you try a cash-to-cover type of exercise.

Remember that only the shares exercised and held are subject to the alternative minimum tax. The others you exercised and sold are subject to ordinary income (or the rules for a disqualifying disposition).

For the 6,673 incentive stock options shares your exercised and held, the bargain element is subject to AMT is $633,935. Assuming AMT of 28%, the total due is $177,502.

For the 3,327 shares that you exercised and sold, the bargain element of those shares will be taxed as compensation income. Again, that amount is $316,065. If we assume a flat 34% tax, you owe $107,421 for these shares. And finally, you still need to buy the shares for $50,000.

Adding these three cash calls together, we calculate that the total cash required for the transaction is $334,923. This is offset by the proceeds of selling 3,327 shares at $100 per share, or $332,700.

There is still a net required cash call of $2,223, which you will need to address even if you do a sell-to-cover type of transaction.

Using Timing to Manage Cash Flow When Exercising Incentive Stock Options

The above scenario is a simplified example that illustrates the shares required to perform a seemingly net cash flow neutral exercise. However, by understanding the timing of when the cash flows are required, it may allow for further planning opportunities.

When you exercise and hold incentive stock options, you must pay for exercise cost at the time of exercise. The AMT, however, is not due until you file your tax return.

Generally, that happens in the year following the year you exercise and hold. But you may still want to consult with your advisor to determine whether or not you should consider making an estimated tax payment in the year of exercise.

It Is this cash flow timing consideration that may add an additional layer of complexity to the conversation. To illustrate this, let’s now assume you exercise your incentive stock options early in the calendar year and that you plan to pay AMT when it is due when you file taxes in the following year.

When you exercise, the required cash will be $50,000, or 1,000 shares multiplied by $5 per share.

To cover the cost of the shares, you will need to sell 500 shares immediately as a disqualifying disposition. This leaves you holding 9,500 shares (or 2,827 more shares than you did in the cashless exercise above).

The potential benefit, as you can see, is a greater number of shares retained.

(Whether or not this is a good idea or a bad idea from an investment and financial planning standpoint is a different conversation. Before you choose any particular exercise strategy, you should understand the impact of taking large positions in company stock.)

The total tax due is also different in this situation.

The 500 shares that are sold as a disqualifying disposition will be subject to ordinary income. With a bargain element of $47,500 and a tax rate of 34%, the total due is $16,150.

For the 9,500 shares you exercised and held, the bargain element is $902,500 and the AMT is $252,700. These amounts, both the AMT and the ordinary income tax, are not due until tax time.

This may allow for you to hold 9,500 shares until you meet the one-year qualifying disposition requirement. Once you do, you can sell some of the shares, obtain long term capital gains treatment, and create an AMT offset that may lead to a future AMT credit.

When the time comes to pay tax, you can use some of these shares to cover the tax cost. If the share price of the stock is still $100 per share, you will need to sell 2,527 shares to generate the required proceeds of $252,270. After selling the 2,527 shares, you will now retain 6,973 shares.

This type of strategy may be suitable if you want to maximize your control over your shares but don’t have the cash to simply exercise and hold all of them. However, this approach may come with additional risk.

The stock price might decrease between your exercise early in the year and the time your sell the shares the following year.  If it does, you may have been better off simply selling your shares and paying the tax immediately.

Exercising in a down market might also force you to pay more in AMT than you want, or more than the stock is worth. However, year end planning may be able to undo such a scenario.

What Does This Tell Us About Exercising Incentive Stock Options?

Much of the talk regarding incentive stock options centers around the alternative minimum tax. The AMT is a byproduct of seeking a potentially more advantageous tax rate via a qualifying disposition. In order to achieve a qualifying disposition, you must hold the shares for a least one year post-exercise.

While the AMT can and should be part of the conversation if you have incentive stock options and want a qualifying disposition, you should also be aware of cash flow and how that can influence your decision-making.

Cash flow specifically speaks to how much money you need, when you need it, and how much you can offset via a disqualifying disposition. By understanding cash flow, you may be able to entirely offset the cost of your exercise right away. You may also be able to maximize the number of shares you can exercise and hold by delaying the sale of shares to cover the AMT.

These decisions are nuanced and complex, and if you’re dealing with stock options, it’s probably well worth working with a professional who can help guide you to the right choices for your goals and overall financial plan.

The content herein is for illustrative purposes only and does not attempt to predict actual results of any particular investment.   Diversification does not guarantee a profit or protect against a loss.  None of the information in this document should be considered as tax advice.  You should consult your tax advisor for information concerning your individual situation.  Tax services are not offered through, or supervised by, The Lincoln Investment Companies.

6 Things to Consider for Your Pre-IPO Incentive Stock Options

Last Updated on by 6 Comments

The choice of when to exercise your incentive stock options can be a difficult one, with serious implications for financial planning and taxes. When your company is still pre-IPO, that opens up an entirely separate set of concerns that you may need to be aware of.

The issues associated with pre-IPO incentive stock options (ISOs) are particularly relevant now, as early-stage companies increasingly find private funding sources and delay the date of their IPO. As the length of time between startup and IPO increases, more and more employees are facing the question of the costs and benefits of pre-IPO ISO exercise.

In this article, we will look at six important things to consider if you have pre-IPO incentive stock options.

1 – How Do Pre-IPO Incentive Stock Options Work?

Most of the stock option explanations you’ll find online and in textbooks assume that the company’s stock is publicly traded. With a public market, you can easily compare the exercise price of your incentive stock options to the current trading price of your company’s stock to get a good estimate of what your options are worth. Even if you don’t plan to exercise or sell right away, you have a good baseline value to use in decision making.

In contrast, pre-IPO shares don’t trade on the open market, and therefore may not have a readily defined price. If you choose to exercise pre-IPO, the estimated value of the stock you purchase is likely based on the most recent assessment of your company’s fair value, which is calculated periodically.

You’ll likely need to wait until the next valuation to know whether or not the stock price is up or down, and whether or your exercise was a good decision.

Once you have exercised your options, you will own shares in your company. While these shares have some similarities with shares of publicly-traded companies, there are also important differences, which are discussed below.

2 – Is There an IPO Date in the Near Future?

What does it really mean to be pre-IPO? Simply that your company is not publicly traded, but may do an offering in the future. However, that is not necessarily a guarantee that the IPO will come soon, or indeed, ever.

When doing your financial planning, you should take into account the possibility that an IPO may come later than expected, if at all. More and more frequently companies may be able to secure necessary financing from venture capital and bank syndicates, which makes an IPO less urgent from management’s perspective.  Or alternatively, the company simply do not grow to the point that warrants an IPO.

Has an IPO date been announced? Or at least a target year or quarter? Even in the case of companies that have already begun the underwriting process, IPO dates can be delayed significantly if market conditions change.

As a result, you should take contingency planning into account when thinking about your pre-IPO exercise plans. What happens if the IPO takes place later than expected? How would this affect your cash flow and tax situation? For example, what if you exercise your pre-IPO incentive stock options, pay for them in cash, pay the tax, and the lPO never occurs. You may find yourself paying cash for something that you may never get back in return. It’s best to be prepared for good and bad outcomes when dealing with uncertain future events.

3 – What If the IPO is Late (Or Never Comes At All)

If you choose to exercise pre-IPO, you will own shares of a non-public company. In some ways this is similar to owning shares of a public company, but there are some important differences.

For example, while you may be able sell your shares to another party, some instances it may not be easy to do so.  Some plans may not allow for the sale of pre-IPO shares at all.

If you are allowed to sell to a third party, you will have to find someone else to buy the shares. While exchanges for buying and selling shares of private companies exist, they can be opaque and illiquid compared to public stock exchanges. You may find that you are only able to sell your shares at a price below what you consider to be fair market value.

After all, one of the most important advantages of an IPO is to provide you with an easy venue for buying and selling shares. Prior to listing, you may find this lack of venue to be an obstacle in realizing the full value of your options.

Even if you can sell, there may be restrictions on the sale of your stock pre-IPO, such as right of first refusal This means that the board or another party has the option to buy your shares from you before you can sell to a third party. Again, you should check with your plan document to see what you can and cannot do.

4 – Are You Prepared for a Lockup Period?

Once an IPO takes place, sale of your shares will likely become much easier, and pricing more transparent. However, you should be prepared for a lockup period that may restricts sale of stock. During this period, often 6 months post IPO, you may not be able to sell your shares of stock per the agreement your company has with an investment bank (the company helping your firm go public).

Of course, you may wish to hold on to your shares during this period for other reasons, hoping for stock appreciation or waiting for the long-term capital gains period to complete. Since long-term capital gains are taxed at a lower level, it may be advantageous to exercise your incentive stock options early so that you can begin the holding period requirements, meaning a post-IPO sale will be considered a long term gain sooner rather than later.

In any case, it’s important to take the lockup period into account for your financial planning, since you won’t be able to tap into the value of those shares until after the lockup period has expired should you have a sudden need for liquidity.

5 – What are the Tax Implications of a Pre-IPO Exercise?

While taxes are always important to take into account when considering the timing of exercising your incentive stock options, it’s an especially crucial consideration for pre-IPO companies. Why? Because these shares can be more difficult to liquidate, meaning you may incur a tax liability upon exercise without being able to sell some of the shares you purchased to pay your tax bill.

The tax effect of your exercise will depend on whether you hold incentive stock options or non-qualified options (NSOs). The pre-IPO sale of ISOs in particular can create tax issues, because exercise of ISOs may trigger an alternative minimum tax (AMT) liability.

The AMT is a dual tax system, where taxes owed are calculated using both the rules for ordinary income and an AMT calculation. You then pay the higher of the two numbers, AMT or ordinary income. So, by exercising your pre-IPO ISOs, you can potentially increase the overall amount of taxes you owe. However, you may also be exercising at a point when the AMT is the lowest it will be if the price continues to appreciate.

For AMT purposes, the bargain element (the difference between the exercise price and fair market value at exercise of your ISOs) may add to your income in the year of exercise.

Any pre-IPO ISOs you exercise may increase your taxes for AMT purposes, but won’t increase your regular tax liability (assuming you don’t sell your ISO shares during the year.) If your AMT taxes exceeds your regular taxes, you’ll have to pay more than you otherwise would.

The end result is that simply exercising and holding your shares can cause your tax liability to increase. If you need to sell some of your shares to cover those taxes, you may not be able to.

The tax effect is somewhat different for NSOs. Exercise of your NSOs won’t trigger an increase in your AMT liability, but the bargain element is still taxable as ordinary income. Therefore, exercise will increase your income in the year of the exercise, which can increase the taxes you will need to pay.

6 – Advantages of a Pre-IPO Exercise of Incentive Stock Options

Despite the tax issues discussed above, there can be considerable advantages to pre-IPO option exercise. Many employees of pre-IPO firms are hopeful that there could be substantial stock appreciation in the years following an IPO. If this turns out to be the case, then exercising in the pre-IPO period can have tax advantages in the long run.

For ISOs, exercising early can help to limit the total AMT effect. While the exercise itself can trigger an AMT liability (depending on the assessed fair market value of the stock), waiting several years to exercise your options could increase the AMT effect substantially if there is significant stock appreciation.

Imagine two alternative scenarios, one in which you exercise your ISOs pre-IPO, and another where you exercise two years later, after the IPO has gone to market, the lockup period has expired, and the price of the stock has appreciated.

Shares Exercise Price FMV
Pre-IPO 10,000 $1 $2
Post-IPO 10,000 $1 $35

If you exercise pre-IPO in this example, your bargain element is ($2 – $1) x 10,000, or $10,000. So your taxable income for AMT purposes will increase by $10,000, limiting the possibility that you’ll be exposed to the AMT in the year of exercise. If we assume you are subject to AMT and assume at flat 28% tax rate, the total AMT bill will be $2,800.

Waiting until the post IPO period to exercise your incentive stock options, however, means that your bargain element increases substantially, to ($35 – $1) x 10,000, or $340,000. This could mean a much larger AMT liability in the future. In fact, at the same assumed 28% tax bracket, the total AMT bill is $95,200.

Of course, nobody can predict what the stock market will do in the coming years. But given the potential for price appreciation between IPO and following the IPO, you should take this possibility into account when doing your planning.

The other tax advantage of pre-IPO exercise to consider is that the clock for a qualifying disposition begins at exercise.  If you exercise pre-IPO, you have begun the holding period of your stock option on the date of exercise.  This means that you may achieve the qualifying disposition holding requirement when the post IPO lockup period expires.  This, in turn, may give you additional flexibility to sell your ISO shares sooner than had you waited to exercise post-IPO, and still obtain potentially preferential long-term capital gains treatment.

What Now with Your Pre-IPO Incentive Stock Options

Any incentive stock option exercise decision should also be considered alongside your other financial planning needs. But as you can see, the unique issues associated with pre-IPO option exercises make careful planning especially urgent.

While there may be several advantages to a pre-IPO exercise such as a lower AMT bill or the start of your qualifying disposition holding period, the potential benefits should be weighted against the risk of buying stock that you may never be able to sell.

This conversation often circles back to good financial planning.  Discussing what you are looking to achieve, what risk you are willing to assume, how much you believe in the company, and where you are in your lifecycle.

Once you evaluate the option in the scope of a larger plan, you can be informed to make a good decision about whether or not a pre-IPO exercise is a good idea for you.

The content herein is for illustrative purposes only and does not attempt to predict actual results of any particular investment.   Diversification does not guarantee a profit or protect against a loss.  None of the information in this document should be considered as tax advice.  You should consult your tax advisor for information concerning your individual situation.  Tax services are not offered through, or supervised by, The Lincoln Investment Companies.

 

7 Things You Should Know About Incentive Stock Options

Last Updated on by Leave a Comment

Incentive stock options (ISOs) are a form of compensation distributed by a company to their employees. Typically, companies use ISOs as a vehicle to retain top employees, reward specific milestones or successes or as an incentive when hiring new employees.

ISOs can be a lucrative long-term compensation benefit, particularly if you work for a company that is growing quickly and has a rising stock price. Because they may be highly valuable, incentive stock options have several components that are worth studying.

1 – What is an Incentive Stock Option?

An incentive stock option is a specific type of employee stock option that allows you the right to purchase shares of stock at a predetermined price at some point in the future. You are given – or “granted” – a certain number of incentive stock options allowing you to purchase that number of shares of stock.

When you purchase company stock shares via your option, the process is known as exercising your incentive stock options. There are several aspects to exercising your options, as you’ll see below.

2 – How Do You Receive Incentive Stock Options?

You are awarded incentive stock options from your company in the form of an option grant. Usually you’ll be required to “accept” the option grant before it becomes official by signing an acceptance form. This is a formality.

When you receive an incentive stock option grant from your company, it will include several elements that will impact what you can do with your options and when. This information will likely be provided in a combination of documents including the plan document, the plan prospectus, and your specific stock grant details.  It may be wise to obtain this information from your HR department, as company plan rules can differ.

3 – What is Included in an Incentive Stock Option Grant?

Your ISO grant will include the number of share options you are being granted. This is equal to the number of shares you can exercise and buy.

The ISO grant will also include a share price, called the “strike” price or “exercise” price, which is often set by the stock price on the day the company completes the option paperwork. The exercise price determines how much you will pay for each incentive stock option.  This price, multiplied by the number of granted options will tell you how much it will cost you to exercise all your options.

Your ISOs will also include a grant date. This is important because it may affect both when you can exercise your options and the tax implications, which we’ll cover shortly.

The option grant will also include a vesting schedule. The vesting schedule is the timeframe that dictates when you can exercise your stock options.

For example, a 5-year schedule might vest 20% of the ISOs per year until fully vested. Often, vesting schedules are designed to reward you for staying with the company for longer periods of time and can be used as a retention tool for valued employees. Should you leave the company before your ISOs vest, the options may be subject a forfeiture provision where the company will take back unvested options upon your departure.

4 – What is the Process for Exercising Your Incentive Stock Options?

You can exercise ISOs in one of several ways. The approach you choose will depend on your short- and long-term financial goals, cash position, tax situation, need for immediate income, among others. This is an important decision and often worth consulting an investment professional to determine the best approach for your situation.

First, after some or all of your incentive stock options have vested, you can pay cash up front to purchase them. For example, if you were granted 1000 options at an exercise price of $10 per share, once vested, you could purchase the 1000 shares of stock for $10,000 (1000 x $10 = $10,000.) While this is a large sum of cash, purchasing the shares up front can be advantageous if you plan to hold the shares for a long period of time to take advantage of certain tax benefits and hoped-for stock price increases.

You can also exercise your ISOs through a cashless transaction where you immediately sell your vested shares as soon as they are exercised, using the profits to pay for the option costs, and potential taxes, keeping the remainder.

A third approach is to sell enough of the ISOs to pay for the cost of exercising the options, converting the remaining ISOs into shares of stock and holding the stock until a future date.  Assuming the company stock has increased in value since your incentive stock options were awarded, you can sell a portion and take the profits to pay for the remaining shares.

For example, by selling 100 shares @ $100 each, you will receive $10,000, enough funds to pay for all 1000 shares. After selling the 100 shares, you will own the 900 remaining shares.

5 – When Should I Exercise My Incentive Stock Options?

There are a number of factors that affect when you should exercise your ISOs. Again, this is a topic where a financial expert can be invaluable.

Of course, you’ll only be eligible to exercise your ISOs once they have vested. Fortunately, you are allowed to exercise the options as soon as they vest, in most circumstances.

In our earlier example, where 1000 ISOs vested 20% per year over five years, after year one, you would be eligible to exercise 200 ISOs (1000 x 20% = 200).

If the company’s stock has gone up since you were granted the ISO, it may make good sense to exercise the vested options, selling the shares in a cashless transaction and reaping the profits. Some factors that come into play in this decision include whether you need the funds in the near term, whether you’re concerned for the long-term health of the economy, general stock market trends, future prospects of the company, among others.

However, if you have confidence the company will continue to grow and the share price will continue to go up, you can consider waiting for a period of time before exercising your vested options.

Here’s a special circumstance to keep in mind. If you are deemed a company insider, that is, an executive with knowledge of the company’s strategic plans or potential future earnings, you may only be able to exercise options (or sell common stock) during what’s called a trading window, typically in the middle of a given fiscal quarter.  If you know you are an insider or you think you may be, you may want to consult your legal department before you do anything with your options.  This helps protect other shareholders who invest in the company but do not have access to the same level of information as company insiders.

6 – Should I Exercise My ISOs As Soon As They Vest, Or Wait?

When to exercise your ISOs is a judgment call based on a number of factors. First, do you have strong confidence that the company will continue to grow its revenues and, thus, its share price? Remember that often there are macroeconomic factors outside the company’s control that impact whether a company’s stock increases or decreases in value. Trying to predict the future always comes with risk.

Do you need the money now? Are there debts, college funds, a home down payment or other compelling factors that require immediate access to the funds? If so, exercising the ISOs and taking the associated profits can make good financial sense.

If your ISOs and perhaps employee stock purchases represent the lion’s share of your investment portfolio, diversifying your money by exercising your options and moving the profits to other investment vehicles may help protect your long-term financial prospects.

 7 – What are the Tax Implications of Incentive Stock Options?

When exercising ISOs, there are two primary possible tax treatments, called qualifying distributions and disqualifying distributions.

Qualifying distributions may help minimize your tax liability. Qualifying distributions apply when the final sale of the stock occurs at least two years after the option grant date and at least a year after the exercise date.

As a result, your entire profit from the transaction is taxed at long-term capital gains rates, 0%, 15% or 20%, rather than as ordinary income, likely a higher rate.  (Higher-income earners may also owe the 3.8% Medicare surtax on the net investment income.)

Disqualifying distributions occur when you exercise your options in any other way that does not meet the standard for qualifying disposition. One potential benefit of this approach is you have access to the funds from the stocks you sell. This helps protect you against a possible drop in the stock price while waiting to sell and you’ll know how much profit to expect from the transaction.

When you exercise your ISOs, the profit, or spread, is treated as income for alternative minimum tax (AMT) purposes. This could trigger having to paying the AMT in that tax year.

It’s helpful to be familiar with the various tax forms that are commonly associated with incentive stock options. For example, ISOs are reported on Form 1040. You may have ordinary income, capital gains (or losses), or both, which will be reported on your 1040 tax return.

Your Form W-2 will include any compensation income received from your employer shown on your W-2, including your income from ISOs upon selling your stock.

You will receive a Form 1099-B the year you sell your ISO stock shares. It reports capital gain or loss on your tax return.

Your employers will also provide a Form 3921 (Exercise of Incentive Stock Options) for the year you exercise ISOs. Information on the form will help you determine AMT, if applicable.

In the event you are required to pay the Alternative Minimum Tax from profits from selling ISO shares , you will need to file Form 6251 (Alternative Minimum Tax), which you use to report AMT from the exercise of incentive stock options.

If you have a financial advisor or tax accountant, they will be very familiar with these forms and can help you properly prepare your filings.

Moving Forward with Your Incentive Stock Options

Incentive stock options are a powerful tool that may help create great wealth. The more successful the company is, the more options you have, and the lower the exercise price, the more you may stand to gain as the company’s stock price climbs.

They are also potentially complicated compensation vehicles that integrate advanced tax, investment, and personal financial planning goals.  This is why it often takes a specialist in equity compensation or, more likely, a team of individuals to help plan for a suitable outcome.

This leads to the fact that there are a number of important decisions to consider when developing your financial strategy around your ISOs. It’s important to find an expert to help guide you, saving you money, time and possible tax liabilities down the road.

The content herein is for illustrative purposes only and does not attempt to predict actual results of any particular investment.   Diversification does not guarantee a profit or protect against a loss.  None of the information in this document should be considered as tax advice.  You should consult your tax advisor for information concerning your individual situation.  Tax services are not offered through, or supervised by, The Lincoln Investment Companies.

How and Why to Exercise Your Incentive Stock Options Early in the Calendar Year

Last Updated on by Leave a Comment

Ready to exercise your incentive stock options (ISOs)? Then you have many strategies to consider for how and when to take the next steps.

Potential plans to implement include exercising well before the ISOs are set to expire, exercising as expiration nears, or exercising on a rolling basis (so you exercise some ISOs each year as part of diversification strategy).

All of these, and more, are viable paths to take. The right strategy for you will depend on your personal circumstances, goals, and objectives.

That covers potential ways of exercising, or how — but you also need to consider when to exercise. Specifically, you need to choose when during the calendar year to take this action.

Why “When” Matters for Your Incentive Stock Options

When you exercise your incentive stock options, the calculation to determine if and how much alternative minimum tax (AMT) you could owe is based on a calendar year.

If you exercise your ISOs and hold the shares past that year’s calendar end, the bargain element needs to be included as tax preference item on your tax return for the year of exercise. The potential problem is that the AMT bill may be significant.

Exercising early in the calendar year may provide a solution to a big AMT bill that doesn’t require you to have a lot of cash lying around before you take action with your ISOs. When you exercise your ISOs and sell the subsequent shares, you can then pay your  AMT bill from the proceeds.

In addition to helping generate cash needed to pay an AMT bill, exercising early means beginning your holding period for a qualifying disposition earlier in the year. As we’ll see below, this is a critical point in the strategy.

Finally, an early-in-the-calendar-year exercise gives you the opportunity to undo your exercise should things go the wrong way.

If you combine these benefits with a desire to diversify your assets to avoid overexposure to concentration risk, you may find the best time to exercise is early on during the calendar year. Digging in deeper can help you can decide if this strategy makes sense for you.

The Cost of the Alternative Minimum Tax

When you exercise your incentive stock options, the bargain element is a tax preference item for calculating the tentative minimum tax. This calculation impacts how much AMT you may owe.

All else being equal, a larger bargain element means a potentially higher tentative minimum tax and, therefore, a higher AMT bill. Some people often feel so adverse to the idea of generating a large AMT bill that they simply don’t exercise ISOs at all — which might be a case of letting the tax wail wag the dog.

If you have substantial incentive stock options, the fact is you likely can’t avoid paying AMT forever. Delaying an exercise of your ISOs does not avoid AMT — it simply kicks the can down the line. Plus, waiting to exercise could cause you owe even more in AMT if the stock price continues to appreciate.

But the aversion to paying any kind of tax bills aside, you might just not have the money on hand to foot that bill. For example, if you exercise and hold shares from 10,000 ISOs with a grant price of $1 and a current market price of $50, your bargain element will be:

Bargain element = (Exercise Price – Grant Price) X Number of Shares

= ($50 – $1) x 10,000

= $490,000

If we assume a 28% AMT bracket, you will owe:

AMT = Bargain Element x Tax Rate

= $490,000 x 28%

= $137,200

You can expect to owe $137,200 in AMT when you complete your tax return the following April (when your tax return is due). With a such a big number, it’s not unreasonable to see why so many people don’t exercise at all to avoid dealing with the tax consequences.

That’s why exercising early in the calendar year might help.

Why Exercising Your ISOs Early in the Year May Make Sense

Clearly a cash call of $137,200 is a significant amount of money. But instead of avoiding the exercise of your ISOs, you simply need to plan ahead to determine when and how you’ll pay your AMT bill.

This is where exercising early in the calendar year comes into play. It creates an opportunity to pay your AMT bill with the exercised shares themselves, while still getting preferential tax treatment through a qualifying disposition.

Here’s a scenario to illustrate how this could work:

Say you exercise 10,000 ISOs with a grant price of $1 and a current market price of $50 on February 1, 2019. We know (from our calculation above) that this gives you a bargain element of $490,000 and creates an AMT bill of $137,200.

This bill is due when you file your 2019 tax return, and of course the deadline for your return is April 2020.

Fast forward one year. It’s now March 1, 2020, and you sell the shares you exercised on February 1, 2019. Here’s what you’ve just done by taking these actions on these dates:

  1. Assuming March 1, 2020 is at least two years from the grant date of your ISOs, you secured a qualifying disposition.
  2. When the proceeds of the sale of your stock hit your account, you can pull from these funds to pay your 2019 AMT tax bill due by April 2020; the timing solves the problem of having to pull from existing cash on hand to cover the AMT bill.

You could do even more planning to consider selling just enough of your previously-exercised shares to cover the AMT cost (and if you had met the standard for the qualifying disposition, also obtain the preferential tax treatment), rather than selling all your stock if you wanted to continue to hold some shares.

The stock price determines how many shares you need to sell should you want to sell only enough to pay AMT. If the stock price is $50 per share, you need to sell 2,744 shares ($137,200 / $50). If the stock price is $100 per share, you need to sell 1,372 shares.

Are You Too Late in the Calendar Year to Use This ISO Exercise Strategy?

This strategy does not work if you choose to exercise after the April timeframe.

If, for example, you exercised your shares on August 1, 2019 (instead of February 1, 2019), you would still owe $137,200 in AMT. That amount will still be due in April 2020.

But if you want to enjoy a qualifying disposition, then you can’t use the money from selling the shares you received after exercising your options. A qualifying disposition requires that you hold your shares at least 1 year past the exercise date.  If you exercise later than April, you cannot meet both the tax filing time and the 1 year holding requirement.

For example, if you sell your shares before August 1, 2020, you don’t meet the rule to hold the shares at least 1 year past the exercise date in order to enjoy a qualifying disposition. This means you cannot sell in April 2020 as a qualifying disposition.  Assuming you want the better tax treatment, it’s fair to assume you will not sell, and the money for your AMT tax bill would need to come from somewhere else.

As a final “out,” it is important to know that you can sell these exercised shares to pay the tax bill. You don’t have to hold the shares for at least one year. But if you sell after holding them for less than 12 months, then your gain will be taxed as ordinary income.

Using Timing to Exercise a Large Tranche of ISOs

Exercising your ISOs early in the calendar year is not an AMT avoidance strategy. You will need to report the bargain element and pay the AMT on the tax return for the calendar year you exercise.

What exercising early in the calendar year does do is help you manage cash flow by allowing you to use the same shares you exercised early in the year to pay the AMT in the following year.

Considering you’ll be able to use money from the sale of stock to cover the AMT due if you follow this strategy, it might also make sense to exercise a large amount of options early in the calendar year.

Yes, your AMT owed will be greater — but you’ll also receive a larger amount of money from the sale of shares. You can generate cash to use for taxes, and still eave yourself with the rest of the proceeds with which to reinvest in a diversified portfolio or use to fund other savings goals or lifestyle needs.

If you wish to retain shares for the long term, you can choose to only sell off enough shares to cover the cost of paying AMT.  You’d have more exercised shares that meet the qualifying disposition standard. This gives you greater flexibility in how quickly and tax efficiently you can turn stock into cash.

Early in the Year ISOs Gives You an Out at Year-End

While we always hope that the stock price goes up, your stock price can go down between the time you exercise early in the calendar year and the year end.

In this scenario, you might owe significant AMT on the bargain element value at exercise (when the stock price was high) even though the value of your stock is actually down. In a worst-case scenario, the AMT bill could be more than the value of the stock itself.

Exercising early in the calendar year gives you a chance to see how the stock performs, and gives you an out should it perform poorly. The way out is to sell your exercised shares prior to the calendar year end as an intentional disqualifying disposition.

The benefit of this intentional decision is that the bargain element that would have been subject to AMT goes away if you sell your shares by year end. Your taxes owed will depend on the grant price, exercise price, and final sales price, but it’s likely you will be paying some combination of ordinary income and short-term capital gains tax.

While both of these come at less favorable rates than the original long-term capital gains tax that you’d probably rather pay, they are potentially better than holding shares that aren’t worth much and having a big AMT bill to boot.

If you’re bullish on the stock, looking to make a meaningful exercise, and/or want to generate cash to pay AMT, an exercising early in the calendar year might be an appropriate strategy.

The ability to use the same options you exercised to cover the requisite tax is something that shouldn’t be overlooked. In fact, the ability may make it even more palatable to do large exercise.

A good financial plan will consider the above strategy in cohort with your own personal goals and objectives.

The content herein is for illustrative purposes only and does not attempt to predict actual results of any particular investment.   Diversification does not guarantee a profit or protect against a loss.  None of the information in this document should be considered as tax advice.  You should consult your tax advisor for information concerning your individual situation.  Tax services are not offered through, or supervised by, The Lincoln Investment Companies.

How and When Are Incentive Stock Options Taxable?

Last Updated on by Leave a Comment

Incentive stock options are a form of employee compensation that allows you to participate in the appreciating value of a company stock price.

Similar to non-qualified stock options, incentive stock options (ISOs) allow for the purchase of a stock at a predetermined share price. If the current share price of the stock is above the price at which you can exercise your right to buy the share, you have an “in the money” option.

But if the current market price of the stock is below the price at which you can buy the share, you likely pass on your right to exercise the option and buy the shares.

If you find yourself with ISOs, it will be helpful to have a working knowledge of how this type of equity compensation is taxed.

Generally speaking, ISOs aren’t taxed until you exercise the option to buy the share – but over the lifespan of an incentive stock option, you may find yourself dealing with several types of taxes along the way.

Taxes on Incentive Stock Options When You Exercise

The first taxable event occurs when you exercise your ISOs. When you exercise your incentive stock options, you create a reportable tax event that is based on the spread between the grant price of the option and the fair market value of the stock when you exercise, multiplied by the numbers of shares you exercise.

For example, let’s assume you have the following:

  • 10,000 ISOs
  • $1.00 grant price
  • $25.00 fair market value at exercise

In this example, the $24 spread between the grant price and the fair market value at exercise X 10,000 shares is $240,000.

This amount is known as the bargain element. The type of tax you may pay on the bargain element depends on what you do next.

The Difference Between Qualifying vs. Disqualifying Disposition of Incentive Stock Options

Incentive stock options are often preferred to non-qualified stock options because you have the potential to pay long term capital gains rates on the bargain element of the stock should you meet specific holding requirements:

  1. The final sale of the stock must be at least 2 years from the grant date, AND
  2. The final sale of the stock must be at least 1 year from the exercise date.

Should you meet these requirements, the bargain element and future gain gets taxed at preferential rates. This is known as a qualifying disposition.

If you don’t meet the requirements you have a disqualifying disposition and the bargain element will be taxed as ordinary income. It won’t be subject to Social Security and Medicare wage tax (I point this out as a difference between NSOs and ISOs. NSOs are subject to Social Security and Medicare wage tax).

Tax on a Disqualifying Disposition of Incentive Stock Options

Let’s assume you immediately exercise and sell the shares from our hypothetical example above. In this scenario, you turned stock options into cash you can use for personal expenses or allocate to savings.

The rules of a disqualifying disposition state that the bargain element will be treated as ordinary income. If we assume a flat 35% tax bracket, we can assume you will pay $84,000 in tax on your exercise and sell of $240,000 worth of incentive stock options.

Tax on a Qualifying Disposition of Incentive Stock Options

Continuing the above example and assuming you exercise and then hold your ISOs, the tax implications become increasingly more complicated. You may be subject to the alternative minimum tax, or AMT, and long-term capital gains rates (assuming you have a gain when you sell).

AMT is the result of a secondary tax calculation that occurs every year when you file your tax return. As a taxpayer, you generally pay the higher of the regular tax calculation or the tentative minimum tax calculation. The difference you pay if the tentative minimum tax is higher is the AMT.

When you exercise and hold incentive stock options pas the calendar year end, no earned income is reported on your W2. Your adjusted gross income on your regular tax calculation won’t change.

But the bargain element is a tax preference item for calculating the tentative minimum tax. This means that if you exercise and hold incentive stock options, it’s possible that this tentative minimum tax calculation may be the higher of the two. If it is, you’re required to pay that amount instead.

Following the example above, let’s assume the same situation and an AMT tax rate of 28%:

  • 10,000 ISOs
  • $1.00 grant price
  • $25.00 fair market value at exercise

In this scenario, the $240,000 of bargain element will result in a tentative minimum tax of $67,200.

If your tentative minimum tax is higher than your regular tax, you will owe the higher of the two. Tentative minimum tax being the higher of the two is often a direct result of the exercise of ISOs.

Eventually, you’ll probably sell the ISOs you exercised and held. If you sell your shares as a qualifying disposition, you’ll pay long-term capital gains on the entire amount from the original grant price of the stock to the final sales price.

Continuing our example from above, let’s assume that since you exercised the shares, the share price has increased from $25 per share to $65 per share.

  • 10,000 ISOs
  • $1.00 grant price
  • $25.00 fair market value at exercise
  • $65.00 final sale price

Assuming a qualifying disposition, the entire amount from $1 per share to $65 per share should be taxed at long-term capital gains rates. This gain is $640,000. Assuming a flat 15% tax bracket, you will be subject to $96,000 in capital gains tax.

Alternative Minimum Tax Credits

If you are following the above scenario, you may have noticed that you have in fact paid tax twice on a certain portion of the hypothetical example:

  1. You paid the AMT on the amount between $1 and $25 when you exercised and held and
  2. You paid LTCG on the amount between $1 and $25 when you sold the shares

Clearly, this would be a disadvantageous tax scenario. Enter the AMT credit.

When you sell your incentive stock option shares in a final sale, you “undo” the original bargain element that caused you to pay AMT. This “undoing” on your tax return is addressed by figuring regular capital gains and AMT capital gains.  This calculation may allow you to receive an AMT credit to cover the tax you already paid.

Said another way, when you sell your shares, you may get some or all of the money you paid on AMT when you exercised and held back to you.

This explains why much of the attention surrounding incentive stock options centers around AMT. A significant AMT bill may be a reason (or not) to exercise your shares. It should certainly be a reason to consider what your options strategy may be.

Other Advanced Tax Considerations to Remember

In addition to AMT, you may want to think about long-term capital gains. Long-term capital gains may be taxed as low as 0% — or they could be taxed at 15%, or even as high at 20% when your income exceeds $496,600 (married filing jointly in 2020).

When planning for your final sale of stock, it is important to understand what other income you have and how much room you have in various capital gains tax brackets.

For example, one strategy may be to “fill up” your 15% capital gains tax bracket. You can run detailed tax projections to determine how much capital gains you can incur, therefore determining how much stock you can sell, so you only pay 15% capital gains tax.

To do this calculation well, it may take the resources of a good accountant or financial advisor. When considering you could pay far less in tax by getting these complicated decisions correct, it may be well worth hiring a professional to help you.

You may also need to deal with the net investment income tax (NIIT). This tax is paid on capital assets (which are likely the shares of company stock you sell) when your adjusted gross income exceeds $250,000 (for married filing jointly in 2020).

The amount in excess of $250,000 is taxed at 3.8%. If we combine the NIIT with the highest capital gains bracket above (20% + 3.8%), you can see that your long-term capital gains may be taxed as high as 23.8%.

And while not exactly a direct tax in the same sense as long-term capital gains and net investment income tax, you should still pay attention to how AMT is calculated and how it impacts how much tax you pay.

What to Know About Tax and Incentive Stock Options

You may face many different types of taxes owed when you have incentive stock options. The timing of your exercise, hold, and final sale of the stock options can only further intensify the difficulty in understanding which of those taxes apply and what moves to make to reduce your bill.

Unfortunately, this complexity and uncertainty often leads to inaction because people feel afraid of the unknown — or they’re afraid of making a mistake.

If you find yourself with incentive stock options, begin learning about the tax you may pay and when. If you are not prepared to handle that on your own, it may make sense to work with someone who is an expert in tax and other financial planning needs that can arise.

Knowing the rules and planning a good exercise strategy for your incentive stock options can lead to a material difference in the amount you receive in the end.

None of the information in this document should be considered as tax advice.  You should consult your tax advisor for information concerning your individual situation.  Tax services are not offered through, or supervised by, The Lincoln Investment Companies.

The hypothetical examples included are for illustrative purposes only and do not attempt to predict actual results of any particular investment.

Sign Up Now!

Join my mailing list to receive the ebook and my latest news and updates from this site.

You have Successfully Subscribed!

I value your privacy. I will not share your information without your permission. You will receive periodic emails from me and you can unsubscribe at any time.

Join My Newsletter!

Join my mailing list to receive my latest news and updates from this site.

You have Successfully Subscribed!

I value your privacy. I will not share your information without your permission. You will receive periodic emails from me and you can unsubscribe at any time.