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In case anyone else needs to look it up: "What’s the difference between an ISO and an NSO?" - http://www.startupcompanylawyer.com/2008/03/05/whats-the-differen
by jobu 11y ago
In case anyone else needs to look it up:
"What’s the difference between an ISO and an NSO?" - http://www.startupcompanylawyer.com/2008/03/05/whats-the-difference-between-an-iso-and-an-nso/ http://www.startupcompanylawyer.com/2008/03/05/whats-the-dif...
Even reading that, it's still not clear to me whether there would be tax implications at the time of conversion when converting incentive stock options (ISOs) to non-qualified stock options (NSOs).
- chrdlu 11y agoThe difference is when you exercise NSOs, you also have to pay withholding tax (ordinary income tax rate) to the company who then pays it to the IRS. For ISOs, you don't have to pay tax at exercise, but you may be subject to Alternative Minimum Tax (AMT) especially if you have a large spread between your strike price and the fair market value at the time of exercise. (http://employeestockoptions.com/amttax/ http://employeestockoptions.com/amttax/ for more information about AMT)
- hkmurakami 11y agoNo tax at conversion. Only possibility is upon exercise and then eventually at sale.