Which of the following is true regarding stock options?
A)A loss is realized when stock options lapse.
B)There is typically no tax effect on the grant date.
C)Income recognized on the exercise date is greater for incentive stock options than nonqualified options.
D)The bargain element on a nonqualified option is taxed to employees at capital gain rates.No tax effect is incurred by employees or employers on the grant date.

Question

Quizplus · Accepted Answer

There is typically no tax effect on the grant date for stock options, as taxation usually occurs upon exercise or sale.

Which of the Following Is True Regarding Stock Options