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I think I have a shot to pull one over on Uncle Sam, but I don't know if it is possible.

I've been granted an ISO of 5000 shares at a strike price of $1.50 in a privately held company. I am postive this company will IPO within 3 years and do very well.

Since, from my understanding, a taxable event is created when the options are exercised, I would like to exercise the options NOW, when the current market value is probably pretty much matches the 1.50 (no tax liability), as a contribution to my ROTH IRA.

Then when the IPO goes off, I can pick my timing, sell the shares for a MONSTER gain, and roll the money into some mutual funds. I'd love to get a 1000-2000% gain TAX FREE!

Oh, I'd also like put/sell this stock into my wife's Roth and daughter's Educational IRA.

Is this possible? It seems to good be true.

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