Can you transfer ISOs into a GRAT?

August 16, 2000

Subject:   transfer of ISOs
Date:   Tue, 9 May 2000
From:   Jeff

Can you transfer ISOs into a GRAT? If so, what are the tax consequence, if any? Do these transferred options have to be exercised before transfer or can they be exercised within the GRAT?



Date:   28 Jul 2000

Hello Jeff,

ISOs are generally non-transferable. They are personal to the employee.

If stock received from exercising an ISO is transferred to a GRAT before the holding period requirements are met, it will be a disqualifying disposition resulting in ordinary income up to the difference between the fair market value of the stock at the date of exercise and the exercise price.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options – Executive Tax and Financial Planning Strategies.

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