--- title: Stock Option Taxes When Share Prices Fall | NQSO vs. ISO description: Learn how falling share prices can affect NQSO and ISO taxes, capital losses, AMT, and the timing of private-company stock option exercises. image: https://vipwealthadvisors.com/hubfs/stock-options-tax-bill-exceeds-profit-falling-share-price.jpg --- [![VIP Wealth Advisors](https://vipwealthadvisors.com/hs-fs/hubfs/VIP_WEALTH_ADVISORS_LOGO_WEB_334x80_WHITE.png?width=334&height=80&name=VIP_WEALTH_ADVISORS_LOGO_WEB_334x80_WHITE.png "VIP Wealth Advisors")](https://vipwealthadvisors.com) - [Services](https://vipwealthadvisors.com/services) - [Financial Planning](https://vipwealthadvisors.com/financial-planning) - [Tax Planning](https://vipwealthadvisors.com/tax-planning) - [Investment Management](https://vipwealthadvisors.com/investment-management) - [Estate Planning](https://vipwealthadvisors.com/estate-planning) - [Stock Options](https://vipwealthadvisors.com/stock-option-exercise-strategies) - [Budgeting & Cash Flow Analysis](https://vipwealthadvisors.com/budgeting-cash-flow-analysis) - [Insurance Review & Recommendations](https://vipwealthadvisors.com/insurance-review) - [Retirement Planning](https://vipwealthadvisors.com/retirement-planning) - [Education Planning](https://vipwealthadvisors.com/education-planning) - [Cryptocurrency](https://vipwealthadvisors.com/cryptocurrency) - [Home Purchase & Income Properties](https://vipwealthadvisors.com/income-property-home-purchase) - [Hourly Support](https://vipwealthadvisors.com/hourly-support) - [Pricing](https://vipwealthadvisors.com/pricing) - [About](https://vipwealthadvisors.com/about) - [How it Works](https://vipwealthadvisors.com/how-it-works) - [Investment Philosophy](https://vipwealthadvisors.com/insights/investment-strategy) - [Press](https://vipwealthadvisors.com/press) - [Professional Affiliations](https://vipwealthadvisors.com/professional-affiliations) - [Credentials](https://vipwealthadvisors.com/cfp-designations) - [What VIP Really Means](https://vipwealthadvisors.com/insights/story-behind-vip-wealth-advisors) - [Insights](https://vipwealthadvisors.com/media-hub) - [Articles](https://vipwealthadvisors.com/insights) - [Videos](https://www.youtube.com/@MarkThePrivateCFO) - [Contact](https://vipwealthadvisors.com/contact) - [Client Portal](https://vipwealthadvisors.com/client-portal) Hit enter to search or ESC to close [.](https://vipwealthadvisors.com/client-portal) Hit enter to search or ESC to close 1. 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[insights](https://vipwealthadvisors.com/insights) 3. stock option taxes falling share prices October 4, 2026 [Mark Stancato, CFP®, EA, ECA, CRPS®](https://vipwealthadvisors.com/insights/author/mark-stancato-cfp) # Stock Options and Falling Share Prices: NQSO vs. ISO Taxes ![A tall stack of tax forms towers over a small stack of cash on a desk, with a tablet behind them showing a stock chart that peaks and then drops sharply.](https://vipwealthadvisors.com/hubfs/stock-options-tax-bill-exceeds-profit-falling-share-price.jpg) Share this post: - - - ##### Share - - - When private-company stock falls after an option exercise, NQSO and ISO tax rules can produce dramatically different taxable outcomes even when the employee’s actual economic profit is the same. ## Key Takeaways - **Exercise and sale are separate tax events.** NQSO taxes can be triggered before you sell. - **Capital losses may not offset NQSO income.** A falling share price does not erase earlier compensation income. - **ISOs can produce very different tax results.** Certain disqualifying sales may limit ordinary income to your actual gain. - **Year-end timing matters for ISOs.** Holding shares across year-end can change the AMT outcome. - **Exercise decisions belong in the full financial plan.** Taxes, liquidity, concentration, and cash flow all matter. In This Article 1. [Exercising Stock Options and Selling Shares Are Separate Tax Events](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#separate-tax-events) 2. [NQSOs: Ordinary Income Can Survive a Stock-Price Collapse](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#nqso-tax) 3. [ISOs: A Disqualifying Disposition Can Produce a Better Result](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#iso-disqualifying) 4. [Why Selling ISO Shares Before Year-End Matters for AMT](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#iso-amt) 5. [The Same $150,000 Profit, Two Different Tax Outcomes](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#comparison) 6. [What to Review Before Exercising Private-Company Stock Options](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#before-exercise) 7. [Make the Exercise Decision Within Your Full Financial Plan](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#full-plan) 8. [Frequently Asked Questions](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#faq) Here’s the setup: You exercise stock options for $1 per share when your company values the shares at $72. Seven months later, the outlook has changed and you sell for $16. That decline hurts, but you still sold the shares for sixteen times what you paid. On 10,000 options, you put in $10,000, received $160,000 at sale, and ended with a $150,000 pre-tax profit. Now comes the part that surprises people: one version of this transaction produces $710,000 of taxable compensation income. Another produces $150,000. Same exercise price. Same sale price. Same $150,000 economic profit. The difference is the type of option and the tax rules that apply between exercise and sale. For private-company employees and executives, planning for what happens if the stock falls can matter just as much as planning for the upside. What actually drives the result The sale price is only one piece of the tax story. Option type, value at exercise, sale timing, and whether the shares cross a tax-year boundary can all change the outcome. ## Exercising Stock Options and Selling Shares Are Separate Tax Events It helps to separate two events that are easy to mentally bundle together. Exercising an option means paying the strike price to acquire shares. Selling those shares is a second transaction, even when both happen in the same calendar year. With typical nonqualified stock options, or NQSOs, that first event can create taxable compensation immediately. The amount is generally based on the difference between the shares’ fair market value and the exercise price. In other words, you can recognize income before you have received any cash from a sale. Private-company illiquidity, by itself, does not prevent taxation.[1](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-1) ISOs work differently. Exercise generally does not create regular federal income tax, although the alternative minimum tax can come into play. What happens later—especially when and how the shares are sold—determines whether favorable holding-period treatment is available.[2](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-2) Assumptions used throughout the examples The examples below assume vested shares, a valid $72 exercise-date fair market value, and an outright sale for $16 during the same year. They exclude transaction costs and special deferral elections. State taxes require separate analysis. ## NQSOs: Ordinary Income Can Survive a Stock-Price Collapse This is where the NQSO example gets painful. Exercising at $1 when the shares are worth $72 creates $71 per share of ordinary compensation income. Across 10,000 shares, that is $710,000—even though no stock has been sold yet. The result follows the compensation rules for property transferred in connection with services.[3](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-3) That compensation income is not ignored when the shares are eventually sold. The stock’s tax basis becomes $72 per share: the $1 exercise price plus the $71 already included in income. A later sale at $16 therefore creates a $56 loss per share, or $560,000 across 10,000 shares.[4](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-4) But the $560,000 loss does not simply wipe away the $710,000 of compensation income. Because the shares were held for only seven months, the loss is short-term capital. It can offset capital gains, but it cannot freely offset wages. If total capital losses exceed capital gains, the annual federal deduction against ordinary income is generally limited to $3,000, or $1,500 if married filing separately. The rest carries forward.[5](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-5) Put those pieces together. Assuming no other capital transactions and eligibility for the $3,000 deduction, the employee reports $710,000 of compensation, uses $3,000 of the capital loss, and carries $557,000 forward. That is how someone can make $150,000 on the transaction and still face a tax bill that exceeds the cash profit. NQSO compensation also generally carries Medicare tax, potentially Additional Medicare Tax, and Social Security tax up to the applicable wage base. The later investment loss does not reverse those payroll taxes.[6](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-6) A $150,000 economic profit can coexist with $710,000 of taxable compensation income. ## ISOs: A Disqualifying Disposition Can Produce a Better Result Now run the same facts through the ISO rules. A sale seven months after exercise does not meet the ISO holding requirement. Generally, qualifying treatment requires holding the shares more than one year after exercise and more than two years after grant. Sell earlier, and you have a disqualifying disposition.[7](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-7) That label can sound alarming, but the result here is substantially more favorable than the NQSO outcome. For an eligible disqualifying sale below the exercise-date value, ordinary income is generally limited to the actual gain over the exercise cost. In this example, that is $16 minus $1, or $15 per share—$150,000 across 10,000 shares. Section 422(c)(2) provides this limitation when the disposition is a sale or exchange in which a loss, if sustained, would be recognized.[7](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-7) After including that compensation, adjusted basis is $16 per share. Sale proceeds match basis, leaving no additional capital gain or loss. A disqualifying disposition does not retroactively subject the entire transaction to ordinary NQSO treatment.[8](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-8) The sale structure matters. Related-party sales, wash-sale circumstances, and certain other dispositions can prevent the income limitation from applying. A private-company repurchase needs review of its actual tax treatment; calling a transaction a “tender offer” does not settle the analysis. Same economics, different tax framework The ISO result in this example is not favorable because the stock fell. It is favorable relative to the NQSO example because different statutory rules govern how compensation is measured when the ISO shares are sold. ### Same Profit. Very Different Tax Outcome. The stock moved the same way in both examples. The option type determines whether the tax result reflects the actual gain or an earlier, much higher value. [![Infographic comparing NQSO and ISO taxes on the same $150,000 profit. A balance scale shows a heavy stack of tax forms on the NQSO side and a few coins on the ISO side. In this example, the NQSO produces $710,000 of taxable compensation income plus a $560,000 short-term capital loss, while an eligible ISO disqualifying sale produces $150,000 of taxable income.](https://vipwealthadvisors.com/hs-fs/hubfs/Imported_Blog_Media/nqso-vs-iso-same-profit-different-tax-bill-infographic.png?width=1200&height=1200&name=nqso-vs-iso-same-profit-different-tax-bill-infographic.png)](https://vipwealthadvisors.com/hubfs/Imported_Blog_Media/nqso-vs-iso-same-profit-different-tax-bill-infographic.png) ## Why Selling ISO Shares Before Year-End Matters for AMT There is another layer to the ISO decision: AMT. The income limitation described above and the same-year AMT rule are separate issues. If you exercise ISOs and still own the shares at year-end, the exercise spread generally creates an AMT adjustment. In this example, that spread is $710,000. The adjustment increases income used in the AMT calculation; it is not itself the amount of tax owed. If the employee exercises and sells those same shares within the same tax year, no separate ISO exercise adjustment is required for those shares. Regular-tax and AMT treatment of that transaction align.[9](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-9) This is why the calendar matters so much. A December exercise followed by a January sale can have very different consequences from a January exercise followed by an August sale—even though the second investor held the shares longer. The first transaction crosses a tax-year boundary. And if an exercise creates AMT in one year, a later drop in the stock price does not automatically erase it. A subsequent sale can create basis adjustments and potential minimum-tax-credit recovery, but that recovery may take time. For employees counting on a future IPO, tender offer, or other liquidity event, year-end deserves its own planning conversation. December 31 is a real planning boundary For ISO exercises, the question is not only how long you hold the shares. Whether you still own them when the tax year closes can change the AMT analysis. ## The Same $150,000 Profit, Two Different Tax Outcomes Here is the comparison for 10,000 shares exercised at $1, valued at $72 at exercise, and sold for $16 seven months later in the same year. | Item | NQSOs | ISOs: disqualifying sale eligible for income limitation | | --- | --- | --- | | Exercise cost | $10,000 | $10,000 | | Sale proceeds | $160,000 | $160,000 | | Pre-tax economic profit | **$150,000** | **$150,000** | | Ordinary compensation income | **$710,000** | **$150,000** | | Adjusted basis for the sale | $720,000 | $160,000 | | Short-term capital loss | $560,000 | $0 | | Separate ISO exercise AMT adjustment | Not applicable | $0 | These are taxable amounts, not final tax liabilities. Other income, capital gains, deductions, filing status, and state rules affect the ultimate cost. Why the comparison matters Economic profit alone is an inadequate starting point for an exercise decision. Two employees can end with the same cash profit and still face dramatically different taxable income. ## What to Review Before Exercising Private-Company Stock Options Start with the grant documents, not assumptions about the label on the award. An ISO designation has to satisfy specific requirements, including employment rules and the $100,000 annual first-exercisable limit measured using grant-date value. Portions that exceed that limit are treated as nonqualified.[7](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-7) Then look at valuation and liquidity together. Confirm the common-stock value that applies at exercise, but do not build the plan around a future liquidity event as though it were guaranteed. If an IPO or tender offer is part of the expected path, model that case—and then run the numbers again assuming it is delayed or canceled. The next question is cash. How much can the household commit to the exercise and the potential tax cost without putting other goals under pressure? In some cases, exercising in stages may deserve consideration, especially when a large exercise would add even more exposure to the same company that already provides the employee’s salary. We also want to keep tax liability and tax withholding separate. Withholding is simply money already paid toward the eventual bill; it is not another layer of tax. When comparing exercise strategies, the more useful question is: What is the total expected tax, how much has already been paid, and where will the remaining cash come from? A tax projection without a funding plan is only half a plan. Do not leave the reporting details until the last minute, either. Payroll reporting and tax-return preparation need to line up. Basis should reflect compensation already recognized, even if the broker’s Form 1099-B does not. Missing that adjustment can overstate taxable gain.[2](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-2) ## Before You Exercise, Model More Than the Upside - Confirm whether each tranche is actually an ISO or NQSO. - Verify the current common-stock value used for the exercise. - Stress-test the plan if the expected IPO, tender offer, or liquidity event is delayed. - Calculate both the exercise cost and the potential tax funding requirement. - Measure how much additional company-stock concentration the exercise creates. - Coordinate withholding, estimated taxes, payroll reporting, and basis reporting before filing. ### What to Check Before You Exercise A low strike price can make an exercise look inexpensive. The bigger question is whether the valuation, liquidity, tax exposure, and cash requirements fit the rest of your financial plan. [![Checklist infographic titled Before You Exercise Private-Company Stock Options, with five steps: Confirm whether your options are ISOs or NQSOs, including the $100,000 annual limit. Verify the stock's fair market value at exercise. Plan for a delayed or canceled IPO or tender offer. Fund the full tax bill, since withholding may not cover it. Track your cost basis so you don't overstate your gain.](https://vipwealthadvisors.com/hs-fs/hubfs/Imported_Blog_Media/before-you-exercise-private-company-stock-options-checklist.png?width=1200&height=1200&name=before-you-exercise-private-company-stock-options-checklist.png)](https://vipwealthadvisors.com/hubfs/Imported_Blog_Media/before-you-exercise-private-company-stock-options-checklist.png) ## Make the Exercise Decision Within Your Full Financial Plan A low strike price can make an exercise look inexpensive. Sometimes it is. But the strike price is not the only commitment you are making. The bigger exposure may be the taxes, cash needs, and company-stock concentration that come with acquiring and continuing to hold the shares. This is why we do not look at equity compensation in isolation. At VIP Wealth Advisors, an option exercise is part of the broader financial and tax plan: liquidity, concentration, tax timing, and household cash flow all have to work together. The upside case matters, of course. But planning for a disappointing outcome deserves the same attention as planning for a successful exit. Planning for a disappointing outcome deserves the same attention as planning for a successful exit. ## Frequently Asked Questions \+Do I owe taxes if my company stock falls after I exercise my options? You can. With typical vested NQSOs, exercise creates compensation income that a subsequent price decline does not reverse. With ISOs, the sale terms and timing determine the result; an eligible disqualifying sale may limit compensation to your actual gain. \+Can a capital loss offset income from exercising NQSOs? Only to a limited extent after offsetting capital gains. The annual net capital-loss deduction against ordinary income is generally $3,000, or $1,500 if married filing separately. The remaining loss carries forward; it does not automatically cancel the option-related wages.[5](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-5) \+How is an ISO disqualifying disposition taxed when the sale price is below exercise-date value? For an eligible sale, ordinary income is generally limited to the gain above exercise cost. In our example, selling for $16 after paying $1 produces $15 of compensation per share and no additional capital gain or loss, before costs. Certain transactions do not qualify for this limitation.[8](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-8) \+Does selling ISO shares in the same year as exercise eliminate AMT? It generally eliminates the separate ISO exercise adjustment for those shares. It does not guarantee that your overall return has no AMT liability. Shares retained into another tax year require separate analysis.[9](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-9) \+Are ISO disqualifying dispositions subject to Social Security and Medicare taxes? Generally, no. Although the compensation is reported in W-2 Box 1, it is excluded from Social Security and Medicare wages. Federal income-tax withholding is not required on this income, so you may need estimated payments or additional withholding elsewhere.[6](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#fn-6) \+Can a later, lower sale price reduce the value reported at exercise? Not automatically. The relevant value must reflect the facts at exercise. A later sale may prompt a review of an earlier appraisal, but a subsequent business decline alone does not prove the original valuation was wrong. Contemporaneous documentation matters. ## Before You Exercise, Know What Happens If the Stock Falls A stock-option exercise can affect taxes, cash flow, concentration risk, and future liquidity all at once. We can help you model the decision in the context of your full financial plan—not just the upside case. [Schedule a Conversation](https://vipwealthadvisors.com/meeting) --- ## Sources & Footnotes Primary tax authorities and IRS guidance referenced in this article. Repeated citations use the same footnote number. 1. [Treasury Regulation §1.83-7 — Taxation of nonqualified stock options](https://www.law.cornell.edu/cfr/text/26/1.83-7) 2. [IRS Publication 525 — Taxable and Nontaxable Income](https://www.irs.gov/publications/p525) 3. [Internal Revenue Code §83 — Property transferred in connection with performance of services](https://www.law.cornell.edu/uscode/text/26/83) 4. [Treasury Regulation §1.83-4 — Special rules](https://www.law.cornell.edu/cfr/text/26/1.83-4) 5. [IRS Tax Topic No. 409 — Capital Gains and Losses](https://www.irs.gov/taxtopics/tc409) 6. [IRS Publication 15-B — Employer’s Tax Guide to Fringe Benefits](https://www.irs.gov/publications/p15b) 7. [Internal Revenue Code §422 — Incentive stock options, including §422(c)(2)](https://www.law.cornell.edu/uscode/text/26/422) 8. [Treasury Regulation §1.422-1 — Incentive stock options; general rules](https://www.law.cornell.edu/cfr/text/26/1.422-1) 9. [IRS Instructions for Form 6251 — Alternative Minimum Tax—Individuals](https://www.irs.gov/instructions/i6251)     [Taxes](https://vipwealthadvisors.com/insights/tag/taxes) [Equity Compensation](https://vipwealthadvisors.com/insights/tag/equity-compensation) [Incentive Stock Options](https://vipwealthadvisors.com/insights/tag/incentive-stock-options) #### ABOUT THE AUTHOR [Mark Stancato, CFP®, EA, ECA, CRPS®](https://vipwealthadvisors.com/insights/author/mark-stancato-cfp) Mark Stancato, CFP®, EA, ECA, CRPS® has over 20 years of experience advising high-net-worth clients, including tech executives, real estate investors, and entertainment professionals. He specializes in tax strategy, equity compensation, and multi-stream income planning—offering white-glove guidance and highly personalized financial solutions. Insights Via Email ## VIP Financial Insights Subscribe to our Financial Insights alerts and be notified by email as soon as new articles are published. ### Subscribe Here! 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[↑](https://vipwealthadvisors.com/insights/stock-option-taxes-falling-share-prices#top) [![Financial Planning Association](https://vipwealthadvisors.com/hs-fs/hubfs/FPA-logo.png?width=189&height=100&name=FPA-logo.png "Financial Planning Association")](https://vipwealthadvisors.com/professional-affiliations) [![XY Planning Network](https://vipwealthadvisors.com/hs-fs/hubfs/XY_Planning_Network.png?width=189&height=100&name=XY_Planning_Network.png "XY Planning Network")](https://vipwealthadvisors.com/professional-affiliations) [![NAPFA National Association of Personal Financial Advisors](https://vipwealthadvisors.com/hs-fs/hubfs/NAPFA.png?width=189&height=100&name=NAPFA.png "NAPFA National Association of Personal Financial Advisors")](https://vipwealthadvisors.com/professional-affiliations) [![Fee Only Network Member](https://vipwealthadvisors.com/hs-fs/hubfs/Fee-Only-Network-3.png?width=189&height=100&name=Fee-Only-Network-3.png "Fee Only Network Member")](https://vipwealthadvisors.com/professional-affiliations) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "abstract" : "Exercising private-company stock options can create a tax bill based on a value that disappears before you ever sell the shares. 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Your Equity Tax Bill May Follow", "thumbnailUrl" : "https://img.youtube.com/vi/eDhFHcera7M/maxresdefault.jpg", "uploadDate" : "2026-10-01T08:00:00-05:00" } } ``` ```json { "@context" : "https://schema.org", "@type" : "FAQPage", "mainEntity" : [ { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "You can. With typical vested NQSOs, exercise creates compensation income that a subsequent price decline does not reverse. With ISOs, the sale terms and timing determine the result; an eligible disqualifying sale may limit compensation to your actual gain." }, "name" : "Do I owe taxes if my company stock falls after I exercise my options?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Only to a limited extent after offsetting capital gains. The annual net capital-loss deduction against ordinary income is generally $3,000, or $1,500 if married filing separately. The remaining loss carries forward; it does not automatically cancel the option-related wages." }, "name" : "Can a capital loss offset income from exercising NQSOs?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "For an eligible sale, ordinary income is generally limited to the gain above exercise cost. In the article's example, selling for $16 after paying $1 produces $15 of compensation per share and no additional capital gain or loss, before costs. Certain transactions do not qualify for this limitation." }, "name" : "How is an ISO disqualifying disposition taxed when the sale price is below exercise-date value?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "It generally eliminates the separate ISO exercise adjustment for those shares. It does not guarantee that your overall return has no AMT liability. Shares retained into another tax year require separate analysis." }, "name" : "Does selling ISO shares in the same year as exercise eliminate AMT?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Generally, no. Although the compensation is reported in W-2 Box 1, it is excluded from Social Security and Medicare wages. Federal income-tax withholding is not required on this income, so estimated payments or additional withholding elsewhere may be needed." }, "name" : "Are ISO disqualifying dispositions subject to Social Security and Medicare taxes?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Not automatically. The relevant value must reflect the facts at exercise. A later sale may prompt a review of an earlier appraisal, but a subsequent business decline alone does not prove the original valuation was wrong. Contemporaneous documentation matters." }, "name" : "Can a later, lower sale price reduce the value reported at exercise?" } ] } ```