Qualifying Disposition

Qualifying Disposition
A sale, transfer or exchange of stock obtained through a qualified stock option incentive plan, namely incentive stock option (ISO) plans and employee stock purchase plans (ESPP), that qualifies for favorable tax treatment for the employee selling the stock. In order to be a qualifying disposition, the employee must sell at least one year after receiving the stock, and two years after receiving the incentive stock option (ISO), or the beginning of the ESPP offering period.

The capital gains treatment for a qualifying disposition only applies to the amount of the sale represented by the difference between the exercise price of the option's stock and the market price at which the stock was sold.

Non-statutory stock options (NSOs) do not qualify for capital gains tax treatment, and are always taxed at ordinary income rates. Some companies do not offer ISOs because, in contrast to non-statutory (or non-qualified) option plans, there is no tax deduction for the company when the options are exercised.


Investment dictionary. . 2012.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • commercial reasonableness — May refer to goods which meet the warranty of merchantability. U.C.C. No. 2 314. In the context of UCC provisions relating to disposition of collateral upon lawful repossession, means that the qualifying disposition of the chattel must be made in …   Black's law dictionary

  • commercial reasonableness — May refer to goods which meet the warranty of merchantability. U.C.C. No. 2 314. In the context of UCC provisions relating to disposition of collateral upon lawful repossession, means that the qualifying disposition of the chattel must be made in …   Black's law dictionary

  • Installment sale in the United States — In United States income tax law, an installment sale is generally a disposition of property where at least 1 payment is to be received after the close of the taxable year in which the disposition occurs. [usc|26|453(b)(1).] The term installment… …   Wikipedia

  • education — /ej oo kay sheuhn/, n. 1. the act or process of imparting or acquiring general knowledge, developing the powers of reasoning and judgment, and generally of preparing oneself or others intellectually for mature life. 2. the act or process of… …   Universalium

  • France — /frans, frahns/; Fr. /frddahonns/, n. 1. Anatole /ann nann tawl /, (Jacques Anatole Thibault), 1844 1924, French novelist and essayist: Nobel prize 1921. 2. a republic in W Europe. 58,470,421; 212,736 sq. mi. (550,985 sq. km). Cap.: Paris. 3.… …   Universalium

  • Daytona 500 history — Historical records, statistics, and race recaps of the Daytona 500, held annually at Daytona International Speedway in Daytona Beach, Florida. Contents 1 Pre race history 2 Race recaps 2.1 1959–1969 …   Wikipedia

  • Plato: ethics and politics — A.W.Price I Plato followed his teacher Socrates into ethics by way of a question that remained central in Greek thought: what is the relation between the virtues or excellences (aretai) of character, and happiness (eudaimonia)?1 Both concepts… …   History of philosophy

  • Sanctifying Grace — • Treatise on this fundamental building block of Christianity Catholic Encyclopedia. Kevin Knight. 2006. Sanctifying Grace     Sanctifying Grace      …   Catholic encyclopedia

  • Tax deduction — This article is about the deduction of expenses for the purpose of calculating taxable income. For tax deducted at source, see Withholding tax. Taxation An aspect of fiscal policy …   Wikipedia

  • Cremation — A Hindu Cremation in India P …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”