> Did I screw up by not exercising the options earlier this year?
Not really. At the time it was obviously more of a gamble, so it may have been a smart move to keep your money in the bank.
> my understanding is that I'd be taxed on the current value
Correct. So assuming that the FMV of the company for your common stock is about 1/3 of the 40M, and you acquired 3% of that, the government now thinks you just made (40M*0.03/3) = $400k, and they will expect you to pay tax on that as income or AMT in your 2015 return.
So unless you have a few hundred thousand dollars lying around, it's too late, don't worry about it. You still have another 9 years to wait around and see whether the company makes it big time, at which point paying tax will be the least of your worries.
Not really. At the time it was obviously more of a gamble, so it may have been a smart move to keep your money in the bank.
> my understanding is that I'd be taxed on the current value
Correct. So assuming that the FMV of the company for your common stock is about 1/3 of the 40M, and you acquired 3% of that, the government now thinks you just made (40M*0.03/3) = $400k, and they will expect you to pay tax on that as income or AMT in your 2015 return.
So unless you have a few hundred thousand dollars lying around, it's too late, don't worry about it. You still have another 9 years to wait around and see whether the company makes it big time, at which point paying tax will be the least of your worries.