Understanding Your Options- Tax Implications of Stock Options

This is an excellent article on the Tax Implications of Stock Options

As with any type of investment, when you realize a gain, it’s considered income. Income is taxed by the government. How much tax you’ll ultimately wind up paying and when you’ll pay these taxes will vary depending on the type of stock options you’re offered and the rules associated with those options.There are two basic types of stock options, plus one under consideration in Congress. An incentive stock option ISO offers preferential tax treatment and must adhere to special conditions set forth by the Internal Revenue Service. This type of stock option allows employees to avoid paying taxes on the stock they own until the shares are sold.

via Understanding Your Options- Tax Implications of Stock Options.

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