Option Guide
Stock Option Types
Understanding ISO vs NSO and tax implications
Option Types Comparison
| Type | Description | Tax Treatment |
|---|---|---|
| ISO (Incentive Stock Option) | Qualified, tax-advantaged | AMT possible |
| NSO (Non-Qualified) | Taxed at exercise | Ordinary income |
| RSU (Restricted Stock Unit) | No exercise cost | Ordinary income |
ISO Holding Requirements
Qualifying Disposition
Hold 2+ years from grant, 1+ year from exercise
Long-term capital gains rate
Disqualifying Disposition
Sold before holding period met
Taxed as ordinary income