Are stock options taxed?

Answer by  Att4372 (1704)

Stock options create taxable income. Non-qualified options are taxed as ordinary income when issued. Qualified options are taxed when exercised. Tax is based on how they are exercised.

Answer by  Taxmatters (169)

Incentive Stock Options (statutory) are not taxed (income recognized) on the grant date or exercise date. When the stock is sold the difference between the grant price and the amount of the sale is taxable. If held for the required holding period, it is taxed at capital gain rates rather than ordinary income rates.

Answer by  tamarawilhite (17883)

Yes. Stock options are taxed at the income tax rate unless they are exercised (you buy the stock at that rate). Then it is the capital gains rate.