A nonqualified stock option will create a permanent book-tax difference in a given year if it accrues during the year but is exercised in a later year.
A deductible temporary difference (deferred tax asset) is created in the year the option accrues and is recorded as an expense for book purposes.

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The Answer of A nonqualified stock option will create a permanent book-tax difference in a given year if it accrues during the year but is exercised in a later year.
A deductible temporary difference (deferred tax asset) is created in the year the option accrues and is recorded as an expense for book purposes.

A Nonqualified Stock Option Will Create a Permanent Book-Tax Difference