I'm on board with your first suggestion - it all gets a lot simpler (and fairer) if you just tax the realized gains. For the rest though, it may be worth point

I'm on board with your first suggestion - it all gets a lot simpler (and fairer) if you just tax the realized gains. For the rest though, it may be worth pointing out that the first $100,000 in qualified stock options _per year_ are not taxed. If you're in a situation where the taxes on $(your annual options) - $100,000 are significant in comparison to your rent, I'd wager you're doing pretty well.