Incentive stock options long term capital gains

Show more usage examples URL to this page: Reproduction of all or part of this glossary, in any format, without the written consent of WebFinance, Inc. Home Articles Tips Browse by Subject Term of the Day. A type of employee stock option which provides tax advantages for the employer that a non-qualified stock option does not, but which is subject to more stringent requirements.

For ISOs, no income tax is due when the options are granted or when they're exercised. As long as the sale is at least two years after the options were granted incentive stock options long term capital gains at least one year after they were exercised, they'll be taxed at the lowerlong-term capital gains rate ; otherwise, the sale is alabama livestock auction reports a "disqualifying disposition ", and they'll be taxed as if they were nonqualified options the gain at exercise is taxed as ordinary incomeand any subsequent appreciation is taxed as capital gains.

Related Terms bargain element non-statutory stock option non-qualified stock option qualifying disposition statutory stock option Alternative Minimum Tax AMT NSO dividend equivalent right. Nearby Terms incentive bonus incentive fee incentive scheme inception incestuous share dea Browse Definitions by Letter: Company Advertise with Us About us Content Licensing Careers Contact Us.