Are unvested employee stock options subject to the exit tax?

The treatment of unvested options depends on the specific option plan and when the options are considered to have accrued in value. Vested but unexercised options are generally treated as assets subject to the exit tax deemed sale. Unvested options — where the right to the underlying shares has not yet been earned — may not yet constitute an "asset" for exit tax purposes, but this is a contested area and depends on the terms of the plan. Options held under Israel's Section 102 plan (the standard employee equity arrangement for Israeli-resident employees) have their own tax rules and timing considerations that interact with the exit tax in complex ways. Professional advice specific to your option grant terms is essential.