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.

Question

Quizplus · Accepted Answer

Typically, there is no tax effect for the recipient of stock options on the grant date. The tax implications usually occur at the time of exercise or sale of the acquired shares, depending on the type of option (incentive stock options vs. nonqualified stock options).

Which of the Following Is True Regarding Stock Options