I’m Daniel Zajac, CFP®

I write about employee stock options and equity compensation in a way that is easy to understand.

What is a Disqualifying Disposition of Incentive Stock Options?

Incentive stock options, or ISOs, are a type of employee stock option. Often considered the favorable employee stock option as compared to non-qualified stock options, they may present an opportunity to receive a preferential tax treatment when you exercise and sell the incentive stock option shares. To obtain this preferential tax treatment, you must meet specific rules regarding the timeline between when the incentive stock option is granted, and when you sell your shares. The timeframe between when you exercise the option and when you sell the shares matters, too.

read more

The Basics of Non-Qualified Stock Options

Non-qualified stock options are a type of employee stock option that is unique in that they retain tax characteristics similar to restricted stock units and employee control and decision-making similar to incentive stock options. From an income tax standpoint, profit is subject to ordinary income tax rates when you exercise your non-qualified stock options. 

read more

The Basics of Incentive Stock Options

There are two types of employee stock options: incentive stock options, or ISOs, and non-qualified stock options, or NQSOs. Generally speaking, incentive stock options are the more complicated of the two. These complexities may include holding period requirements, potentially preferential tax treatment, and the alternative minimum tax.

read more

Dive Deeper

Whether you’re just getting started or expanding your knowledge, here are some resources to get you started.

Hi, I'm Daniel Zajac, CFP®, EA

Daniel Zajac headshot small

I write about equity compensation and employee stock options in a way that is easy to understand.