R2-M4 Employee Stock Options

Question 1

what are types of employee stock options?

Answer 1

• Nonqualified
• Qualified
  + Incentive stock options
  + Employee stock purchase plans

Question 2

what are rules of nonqualified options?

Answer 2

• taxed when GRANTED if the option has a readily ascertainable value at the time of the grant (if FMV known)
• nonqualified options often do NOT have an ascertainable value, the option is generally taxed when EXCERCISED

Question 3

what are rules of qualified options?

Answer 3

1. In