Can you transfer ISOs into a GRAT?
August 16, 2000
Subject: transfer of ISOs
Date: Tue, 9 May 2000
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
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.