A potential hitch: The $280,000, while a tax savings, is also still a big bill. Paying it may not present a problem for an informed executive who has resources. Not so for uninformed employees who might have thought to pay the bill by selling the shares. For them, it could be a "disaster," said Cervino.
Indeed, Thomas does not ordinarily recommend holding all the shares after exercising an ISO with such a large built-in profit. Many option holders can sell as many as half the shares or more immediately after exercising without sacrificing tax benefits.
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