What is Non-Qualified Stock Options?
Non-Qualified Stock Options
Non-Qualified Stock Options (NSOs) are standard stock options that do not qualify for special IRS tax treatment, taxed upon exercise and sale.
Detailed Deep Dive
Non-Qualified Stock Options (NSOs) are a flexible equity instrument. Unlike ISOs, NSOs do not carry strict regulatory limits on who can receive them, though they trigger ordinary income tax upon exercise.
Frequently Asked Questions
Q:How are NSOs taxed upon exercise?
The spread between the grant price (strike price) and the current fair market value (FMV) is taxed as ordinary income.
Q:Who can receive NSOs?
Anyone, including standard employees, contractors, advisors, and board members.
Quick Facts
- CategoryLegal
- Key ApplicationEquity compensation for advisors, consultants, and international employees
Coverage Trend12 Weeks
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