[caseysoftware]

With (3), they'd be taxed on the gains when they sell. Not "tax free" at all.

The difference is that they wouldn't be taxed until the gains were realized not when they were imagined on paper.

[tyre]

The reason we have capital gains is to encourage investment. They're not investing $1 for 1m shares to build something better. They're getting $1m worth of something for $1, risk-free.

That gap between strike price and FMV is much more like compensation than it is an investment.

[buryat]

you can borrow against this asset and get basically a tax-free loan

[KptMarchewa]

Can you _actually_ borrow against completely illiquid, pre-IPO asset?

[konfusinomicon]

exactly this. tax time will come, hopefully. until then it's a tax on monopoly money.