A family member was invited by his former boss to invest in a start-up a long time ago, and now that company is working to go public. It sounds like this person needs to provide brokerage account info to the start-up, and the shares will appear in the account prior to the start of trading. Family member is considering cashing out. I'm picking up bits and pieces of info on the internet regarding valuations, but this could be a pretty good windfall for him, as he was a very early round (maybe 1st) investor. Assuming there are no lock outs or other restrictions, if they were to sell their shares when trading starts, how would the profits be taxed? Is this a long-term capital gain? Regular income? Any strategies in this situation to minimize taxes? This person is retired and on SS.
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