ISO EXAMPLE (1 of 2)
01.Core Concepts
On January 5, 2025, Bob (VP of XYZ) is granted 10,000 XYZ ISOs at an exercise price of $10. On February 6, 2026, he exercises all the options when the price of XYZ stock is $42. Bob sells the stock at $60 on February 14, 2027. • What are tax consequences at grant, exercise, and sale? AMTRegular TaxDate At Grant1-5-25 At Exercise:2-6-26 Taxable amount Basis At Sale:2-14-27 Sale price -B a s i s = Gain