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swadesh24
New Member

Did you or FNU buy or receive any Incentive Stock Options (ISOs) from your employer? does RSU and ESPP fall in the category?

 
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1 Reply
JohnB5677
Expert Alumni

Did you or FNU buy or receive any Incentive Stock Options (ISOs) from your employer? does RSU and ESPP fall in the category?

No, an ISO is a different type of plan.

 

ISOs are eligible to receive more favorable tax treatment than any other type of employee stock purchase plan. This treatment is what sets these options apart from most other forms of share-based compensation. However, the employee must meet certain obligations in order to receive the tax benefit. There are two types of dispositions for ISOs:

  • Qualifying Disposition: A sale of ISO stock made at least two years after the grant date and one year after the options were exercised. Both conditions must be met in order for the sale of stock to be classified in this manner.
  • Disqualifying Disposition: A sale of ISO stock that does not meet the prescribed holding period requirements.
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