We’re going in circles, but from my side there is only value if exercised. If they are never exercised, it will always be zero. I’ve seen a lot of options not get exercised because the start up never takes off, the value is never there, etc. If the stock price goes up, they always get exercised and tax is paid. Most people exercise them as soon as they are eligible, so again just tax the spread at exercise and be done with it.
In 20+ years of dealing with people’s taxes, I’ve only seen one instance of an individual just carrying the options. I have a lady I’m working with right now that is getting ready to retire and instead of exercising the options she thought it was better to hold them. Now she’s dealing with several million in options on a company that went public and took off to the tune of a 40x return of her option price, so it definitely happens. However, she’s also about to pay more tax than she probably would have exercising them annually like she should have. I think it’s just a discussion on the vast minority of option holders at this point.