The Alternative Minimum Tax (AMT) is a parallel tax system that disallows certain deductions. ISO exercises create an AMT preference item equal to the spread between the exercise price and fair market value — even though you haven't sold the shares or received cash. For SF employees exercising valuable ISOs, this can create a six-figure AMT bill. We model your optimal exercise amount annually.

Section 1202 QSBS exclusion allows founders and early investors in qualifying C-corps to exclude up to $10M (or 10x investment basis) in capital gains from federal tax at exit. The company must meet revenue, asset, and active business tests. We ensure startups structure correctly from formation and advise investors on QSBS eligibility before they invest.

SF imposes a gross receipts tax on businesses with SF revenue nexus. Rates range from 0.1% to 1.0% depending on industry and revenue tier. High-revenue tech companies also owe the SF homelessness surtax of 0.175% to 0.69% on gross receipts above $50M. We calculate and file all SF city returns.

To avoid California taxing your exit, you must break CA domicile before the liquidity event and ensure the gain isn't "sourced" to California. CA looks at where the business was built, where key decisions were made, and where you lived during value-creation periods. Timing and documentation are everything. We guide founders through the exit planning process well before the transaction.