The pre-IPO tax checklist

Step 1

6 to 12 months before the IPO

• Pull every grant document

  Grant dates, share counts, strike prices, vesting schedules, and whether RSUs are single- or double-trigger. Your equity portal usually has all of it.

• Confirm your ISO and NSO split

  Only $100,000 of ISOs (measured at grant-date value) can first become exercisable each year. Anything above that is taxed as NSOs.

• Decide whether to exercise before the listing

  Exercising ISOs early starts the one-year holding clock and can keep the AMT spread small. Model the AMT first.

• Check for QSBS eligibility

  Shares bought or exercised directly from a qualifying C-corporation and held five years may exclude up to $10 million of gain from federal tax ($15 million for stock issued after July 4, 2025).

• Ask whether sell-to-cover is offered

  It sells enough shares at settlement to pay withholding, so you don't need cash for the tax on day one.