ISO (Incentive Stock Option)

A statutory stock option with special tax rules, possible AMT at exercise.

Also called: incentive stock option, ISOs

An is a type of stock option that may qualify for favorable treatment if you meet holding period rules after exercise.

exercise may not create regular wage income immediately, but the spread can trigger alternative minimum tax () even if you do not sell.

Selling too soon after exercise can be a disqualifying disposition, which may move some gain back to wages on your .

Related terms

Educational definition only. Your grant documents, employer payroll, and tax forms control your situation.