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My company may be acquired: What are my tax issues related to stock options?

The company I work for may be getting acquired. I have a significant set of stock options that have or will vest upon the acquisition. I have not exercised these options. The stock options could be worth between $1-3 million. What are my tax obligations if the company is acquired for cash. Does it change if it is acquired for stock? Is there anyway to reduce the taxes that I will have to pay?

Public Comments

1. I'll give you the answer, but my fee will co-incidently be between 1-3 million. Sorry to tell you that whether it's acquired for cash or for stock, you still will have tax to pay. Good thing is that it will be more than likely long term capital gain, which is taxed at maximum of 15%.