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ClaireRedfield

It's short for Incentive Stock Option. An Option that has met certain tax requirements authorizing the licensee to favourable tax treatment. Such an option is exempt from tax scheduled to the grant date and exercise date (when a non-qualified option would become taxable). If the period of detention two tests are met (two years from the grant date and the date of the sale and one year between the exercise date and the date of the sale), the benefit of the option is considered as a capital gain in the long term rather than ordinary income. If the periods of detention are not fulfilled, there is a "disqualifying disposition".

15:22, 19 November 2013