An employee may exercise a stock option and not pay any taxes until the stock is sold.

Question

Quizplus · Accepted Answer

When an employee exercises a stock option, they may not be required to pay any taxes until the stock is sold, depending on the type of stock option and the tax laws in their country. This is because the employee has not yet realized a profit from the stock at the time of exercise. However, once the stock is sold, any gains may be subject to taxes.

An Employee May Exercise a Stock Option and Not Pay