I believe the comment by byteCoder (regarding taxable gain) has to do with options and not stock. I believe in his case, the employees actually own options which they decided to exercise, causing taxable gain which normally is not taxable because it is paper gain, but under AMT is considered taxable. This hurts since as byteCoder said, you can't pay real tax with imaginary gain but IRS is insensitive to that. Tax free transfer applies if you actually own the stock which is why it is important to actually write a check in the beginning of the company when the stock cost nothing. As a practice, always own stock. Options mean nothing. But of course, this is only possible if you were one of the Founders.

--Denny--