Stock options in general

More and more employers are granting stock options to employees as part of their compensation packages. From the tax standpoint, there are two kinds of options—statutory and nonstatutory. “Incentive Stock Options,” or ISOs, as they are commonly known, are statutory options, because they are specifically provided for in the Internal Revenue Code and are subject to numerous qualification requirements. Options that don’t meet these requirements are nonstatutory options, also known as nonqualified options. Both kinds of options have tax advantages, but there are quite a few differences between them. Here’s some basic information on the taxation of compensatory stock options

Read more