What time counts toward the holding period for my incentive stock options?
July 25, 2001
Date: 18 Dec 2000
I had ISOs granted in June 1996 and exercised them in January 2000, 3.5 years later. Am I still required to keep a holding period of more than one year to qualify for the lower capital gains tax rate or can I now also count the extra 1.5 years in excess of two years between granting and exercise date?
Date: 12 Feb 2001
No. There are two separate holding period requirements to be met. You have already met the first one, to hold the stock more than 2 years after the option is granted. Now you have to meet the second one, to hold the stock more than one year after the option is exercised.