What INCENTIVE STOCK OPTION means: A statutory stock option that allows an employee to purchase stock of the employer below current market price. Although the grant or exercise of such an option results in no income for the "regular" tax, the exercise of an incentive option creates income for the minimum tax. If the taxpayer meets the holding period requirements, gain on the sale of the stock acquired by exercising an incentive stock option is long-term capital gain.
- Definition Installment Method:
- Dictionary accounting enabling a taxpayer to spread the recognition of gain on the sale of property over the payment period. Under this procedure, the seller computes the gross profit percent from the sale incentive stock option definition.
- Definition Independent Contractor:
- Dictionary contracts to do work according to his own methods and who is not subject to control except as to the results of such work. An employee, by contrast, is subject to the control of the employer as to incentive stock option explain.
- Definition Internal Revenue Service (IRS):
- Dictionary The division of the U.S. Treasury Department responsible for collecting taxes incentive stock option what is.
- Definition Income Averaging:
- Dictionary farmers may sometimes reduce tax liability by computing their income tax as if their current farm income had been spread evenly over the preceding three years. The term also is sometimes used when incentive stock option meaning.
How works Incentive Stock Option meaning in Tax definitions I .
