The Making of a Nobody – Part 18 | Decisions–Some are a $%&#@ Doozy – pt. 1

The Making of a Nobody – Part 18 | Decisions–Some are a $%&#@ Doozy – pt. 1
November 28, 2020 Mark S. McNally

There tend to be a few decisions that can ripple across the rest of your days.

One of mine = summer of 2002. Sitting in front of my CPA, a fine man, church leader and professional. He said “We’ve prepared your taxes for 1999-2001. Unfortunately, Mark, well, uh, you hit this piece of the tax code called AMT. It’s unfair, but it’s the law. You owe taxes on your ‘paper gains’ created the day you exercised your stock options.”

He explained on the white board:

“For example, you exercised your options for .05. share

The stock was trading at 100.05/share that day

You earned on paper: $100 per share in profit”

“Even though you later sold it for an average of $5/share, well you need to pay tax on the paper gains and the IRS will give you a credit you can use a little bit over the next 20 years.”

He slid the return across the table: $2.7 million due

“Of course, AMT is a self-reported tax Mark” If you want OUR FIRM to file for you, it will reflect AMT.”

“If you had prepared your own you wouldn’t have known this. “

I chose to have them file the proper tax return. <Gulp!>

Let the chips fall as they may!

To be continued…. #startup

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