Hi everyone,
Would like some help for the following issue.
Taxpayer did early exercise ISO of company A: grant price $1 and exercise price $6. He made 83(b) election. In 2 months, he moved to a new company, company B. He had to sell the ISO back to the company A at grant price $1 based on the agreement. What tax consequence for him?
Is it a DD? If it is a DD, $5 will be on his W-2 income. His basis on the ISO is $6, and he has $5 capital loss.
Is my analysis correct?
Taxpayer wants to know why there would be any tax for him since her actually gets nothing. He purchase the ISO at grant price and sold it back at the grant price.
Thank you!