ISOs: Basics
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FAQs
An incentive stock option (ISO) is a type of stock option that qualifies for special tax treatment...
Companies make some information available voluntarily, while the reporting of other information is mandatory. Section 6039(a) of the Internal Revenue Code requires companies to send an information statement to employees who have exercised incentive stock options or have made purchases in a tax-qualified Section 423 employee stock purchase plan. ISO exercises are reported on IRS Form 3921. ESPP purchases are reported on IRS Form 3922...
Apart from not needing to withhold for ISOs or pay Social Security and Medicare tax, employers derive no real benefit from ISOs. Plus, ISO taxation can be more complex for employees...
The tax code is very specific about what you must do. If you want all the appreciation over the exercise price to be taxed upon sale at favorable long-term capital gains rates, you must...
"Disqualifying disposition" is the legal term for selling, transferring, or exchanging ISO shares before satisfying the ISO holding-period requirements: two years from date of grant and one year from date of exercise. If you sell, transfer, gift, or short the stock too soon, you lose...
If you make a disqualifying disposition with your ISO or ESPP shares...
A disqualifying disposition occurs if you sell, transfer, exchange, gift, or donate the stock that you acquired without...
No. You have a disqualifying disposition just for the ISO shares that are...
The Internal Revenue Code and IRS regulations prohibit transfers, so grant agreements cannot allow ISOs to be transferred in divorce. When divorce occurs, under the property settlement either...
No. Similarly, the transfer of share certificates into a brokerage account to be held in street name would not be a disposition...
The transfer of shares incident to divorce will not be a disqualifying disposition. But...
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What is an "incentive stock option"? 
