What are tax consequences of nonqualified stock options The difference between Zed's option price and the FMV of the Blue, Inc., stock can be taxed (under an election discussed below) before the restrictions lapse. Taxation of nonqualified stock options at grant date or exercise date and effect of making Section 83b election.
Incentive Stock Options ISOs vs. Non-Statutory Options NSOs. Stock options are often used by a company to compensate current employees and to entice potential hires. Nov 1, 2016. Incentive Stock Options ISOs vs. Non-Statutory Options NSOs. Moreover, if the option stock is “qualified small business stock,” it may be.
Tax Topics - Topic 427 Stock Options - IRS.gov Thus, the receipt of stock (or other property) for services is not taxable if there are substantial restrictions on transfer or the property is subject to a substantial risk of forfeiture. Keep in mind that the option (as opposed to the stock it may eventually allow one to buy) has a value independent of the stock. Refer to Publication 525, Taxable and Nontaxable Income, for assistance in determining whether you've been granted a statutory or a nonstatutory stock option.