Using Incentive Stock Options
- Topics:
- Stock Options
- Tags:
- Finance,
- Financial Planning,
- Free Trade,
- Incentive,
- Investment,
- Stock,
- Taxes
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Overview: The main difference between an incentive stock option (ISO) and a non-qualified stock option (NSO) is the tax consequence to the employee and the deductibility to the employer. With an ISO, the employee pays no taxes until the stock is sold (assuming that the employee is not subject to alternative minimum tax). If the employee holds the stock at least two years from the grant date and one year from the exercise date, the gain on the sale would be characterized as a capital gain and taxed at the lower capital gain rate. The employer in this case would receive no tax deduction on the stock option transaction
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Format: HTML | Size: 7KB | Date: Jun 1998 | Pages: 1
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