What is the difference in tax treatment between ISOs and stock grants?

June 5, 2002

Subject:   Stock Grant versus ISO/NQSO
Date:   Mon, 8 Apr 2002
From:   Todd

Hello Michael,

This is a very informative site. Very valuable, but I must admit that after reading your response to stock grant versus ISO, I’m still confused. What is the tax treatment for a stock grant? From a tax treatment standpoint, is the stock grant considered the same as an ISO with zero cost basis or an NQSO with a zero basis?



Hello Todd,

A stock grant is not an ISO or a NQSO. For an analogy, it is taxed “like” a NQSO with a zero option 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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