Nonqualified and Incentive Stock Option plans Flashcards
1
Q
Reg. Tax treatment of NQSOs
W2 at X
A
FMV – X
2
Q
Reg. Tax treatment of NQSOs
Adj. tax basis at X
A
FMV (X + W-2)
3
Q
Reg. Tax treatment of NQSOs
Cap. Gain/Loss at sale
A
Sale price - AdjTaxBasis
= Sale - FMVX
4
Q
ISO regular tax treatment at X
A
No income
5
Q
ISO Reg Adj Tax Basis at X
A
X
6
Q
ISO Reg. Tax at Sale
within 2yrs Grant or 1yr X
A
- W-2 compensation income not subject to payroll taxes = FMVX – X
- Capital Gain = Sale price – FMVX
7
Q
ISO Tax Treatment at Sale
After 2yrs Grant, 1yr X
A
LTCG
= Sale price – FMVX
8
Q
ISO AltMin tax treatment at X
A
Positive adjustment
= FMV – X
9
Q
ISO AltMin AdjBasis at X
A
AltMin: FMV
9
Q
ISO AltMin treatment at Sale
A
Negative adjustment = FMV – X
