## Do I owe taxes on my ISOs?

Here’s a guide to help you figure out if you owe taxes from exercising or selling your incentive stock options.

Important note: This chart is here to help you understand some of the factors that can impact the federal taxes you’ll owe when exercising or selling your ISOs; state taxes may differ. This shouldn’t be considered as tax advice. You should definitely check in with your own tax advisor.

## ISOs

| Condition                                                                          | Outcome                        |
|------------------------------------------------------------------------------------|-------------------------------|
| Was the FMV higher than your strike price?                                         | Yes                           |
| Did you sell your shares?                                                          |                               |
| Before selling, did you hold your shares for more than one year from exercise and two years from grant date? | Yes                           |
| Pay long-term capital gains                                                         |                               |
| No  | Pay short-term capital gains                                                 |                               |
| No taxes | No taxes | No taxes                                                                                   |

*If you early exercised unvested options and didn’t file an 83(b) form within 30 days, you may owe taxes in future years.

This document is provided for your reference only and is not intended to serve as legal, tax, or financial advice. You acknowledge and agree that the making available of this document to you by eShares, Inc. dba Carta, Inc. (“Carta”) shall not constitute the provision of legal service or other professional service by Carta. You should seek advice from an attorney licensed in the relevant jurisdiction(s), tax professionals, accounting professionals, and financial professionals before relying on this document. You further agree and acknowledge that this document has not been prepared with your specific circumstances in mind, may not be suitable for use in your business, and does not constitute tax advice. Relying on this document, you assume all risk and liability that may result.