Understanding the Differences between US Tax Qualified and Nonqualified Stock Options
Categories: Tax
From the option holder’s perspective, the main tax benefits of an ISO are that, if the option-shares are held for two years from the date of the grant of the option and one year from the date of the exercise of the option, (i) there is generally no tax upon the exercise of the ISO (subject to the Alternative Minimum Tax “AMT” Rules, (ii) there is no tax imposed until the sale of the stock relating to the option and (iii) the gain is all capital in nature.
