Why you might want to exercise your vested ISOs this year...

The Small Business Jobs Act of 2010 (the "Jobs Act"), which was enacted September 27, 2010, contains a brief window of opportunity for non-corporate taxpayers to purchase Qualified Small Business ("QSB") stock (also known as "section 1202 stock") that, if the taxpayer holds the stock for more than five years, is eligible for a 100 percent exclusion of capital gains from sale. This tax break only applies to QSB stock purchased after September 27, 2010 and before January 1, 2011.

The exclusion described above has been extended to the end of 2011.