Incentive stock options are:
A)Options that are not taxable to the recipient when the option is granted,even if the market price of the stock is higher at that time than the option price
B)Options that are not taxable to the recipient when the option is granted,unless the market price of the stock is higher at that time than the option price
C)Options that are not taxable to the recipient when the option is granted,unless the market price of the stock is lower at that time than the option price
D)Options that are provided as an incentive for a manager to retire
E)None of the above

Question

Quizplus · Accepted Answer

Incentive stock options (ISOs) are not taxable to the recipient when the option is granted, even if the market price of the stock is higher at that time than the option price. Taxes are typically incurred when the recipient exercises the option or sells the stock.

Incentive Stock Options Are