Let’s get one thing straight: I hate taxes.

I also hate explaining taxes to the Justice League. Every year, someone asks me some ridiculous question like:

• “Can I deduct my cape as a uniform?” (No, Superman.)

• “Does Amazonia have a tax treaty with the U.S.?” (Figure it out, Wonder Woman.)

• “Can I expense Batmobile repairs?” (Nice try, Flash.)

But the worst topic? Equity compensation.

Specifically, Incentive Stock Options (ISOs) vs. Restricted Stock Units (RSUs).

Yes, even superheroes have to deal with stock options. Wayne Enterprises, STAR Labs, and other League-affiliated organizations sometimes grant equity as part of compensation. And when the Justice League started getting RSUs and ISOs as part of their funding structure, everyone looked at me.

The Difference Between ISOs and RSUs (In Terms Even Green Lantern Can Understand)

Both ISOs and RSUs are types of equity compensation—which means instead of paying you in cash, they give you company stock. Sounds nice, right?

Here’s the problem: The IRS is watching. Always.

1. Incentive Stock Options (ISOs) – The “Maybe Tax-Free” Option

💰 Best for: Heroes who like control over their tax bill (and don’t mind gambling on stock price).

⚠ Worst for: Anyone who doesn’t understand the Alternative Minimum Tax (AMT) (which is everyone).

• No tax at the time of grant or exercise (unless AMT applies—more on that nightmare later).

• You only pay tax when you sell the stock—and if you hold it long enough, you get lower capital gains tax rates.

• If you sell too soon (less than 1 year after exercise and 2 years after grant), the IRS punishes you with higher taxes.

The AMT Problem:

• If you exercise your ISOs but don’t sell, the IRS might still tax you under the Alternative Minimum Tax (which exists solely to ruin rich people’s day).

• This means you could end up owing taxes on money you haven’t actually received. (Imagine paying tax on a Batmobile before you even drive it.)

2. Restricted Stock Units (RSUs) – The “Easier, but Higher Tax” Option

💰 Best for: Heroes who like simplicity (and don’t want to worry about AMT).

⚠ Worst for: Anyone who hates losing half their stock to taxes upfront.

• RSUs are taxed as ordinary income when they vest—meaning when the stock officially becomes yours, the IRS takes its cut immediately.

• The company usually withholds taxes (like a paycheck), but depending on your tax bracket, it might not be enough.

• If the stock increases in value after vesting, you’ll owe capital gains tax when you sell.

The Downside:

• You don’t get to choose when to be taxed—which means if the stock price tanks after vesting, you still owe tax on the higher value. (Good luck explaining that to your CPA.)

Which One Is Better for the Justice League?

Depends on who you are:

• Batman (Me) – I prefer ISOs because I have the money to cover AMT and can afford to wait for better tax treatment.

• Superman – RSUs are safer. He doesn’t have time to worry about AMT while saving the planet. Plus, the IRS would probably track him down faster than Lex Luthor.

• Wonder Woman – RSUs. She doesn’t have U.S. citizenship, so she already has enough international tax headaches.

• The Flash – Should not be allowed to handle finances at all. He tried to “day trade” his RSUs and immediately triggered a tax disaster.

• Green Lantern – ISOs might work, but let’s be honest: He’ll forget to sell and get stuck paying AMT penalties.

• Cyborg – Understands this better than me. I let him handle the Justice League’s financial modeling.

Tax Consequences at a Glance

Feature	ISOs	RSUs
Taxes at Grant?	❌ No	❌ No
Taxes at Exercise?	❌ No (but maybe AMT 😡)	❌ No
Taxes at Vesting?	❌ No	✅ Yes (Ordinary Income)
Taxes at Sale?	✅ Yes (Capital Gains if held long enough)	✅ Yes (Capital Gains)
Biggest Risk?	AMT Nightmare	No control over tax timing

Final Verdict: It Depends (And That’s Annoying)

• If you want more control over taxes and are willing to gamble with AMT, ISOs are better.

• If you want simplicity and guaranteed money, RSUs are better.

• If you’re The Flash, stop day trading League funds.

At the end of the day, both ISOs and RSUs can make you money—but if you don’t plan ahead, you’ll owe the IRS more than you expected.

And trust me: The IRS is scarier than Darkseid when they think you’re hiding income.