The employee who exercises an ISO creates a deduction for his employer at that time equal to the difference between the option price and the market price.

Question

Quizplus · Accepted Answer

The employee does not create a deduction for the employer when exercising an ISO. The employer only incurs a tax liability if the employee sells the stock obtained through the exercise of the ISO within a specific timeframe.

The Employee Who Exercises an ISO Creates a Deduction for His