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I am new to investing and this is my first post to this board...so please excuse me if this question sounds a little novice.

My husband received some stock options to purchase his company's stock at a preset price. Since the stock has risen in price, we were thinking of exercising these options. We were told that you must keep your options for two full years before exercising them or they will be counted as ordinary income and that this is a federal law.

Does anyone have any information to clarify this for me. We do not plan to sell the stock for at least a year after purchase.

Thank you in advance.

LC
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Having just gone through a sale of "company stock options" I found out (via the company) after holding the paper for a year, that it was taxed as "un-earned income". It was taxed in the 40+% range.

Don't know if this is "normal" but they say that the IRS mandated it.
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Oooops. I errored on the last post. I held the offer for a year but they executed a buy/sell when they executed the option thereby causing it to be "unearned income" Sorry for the incorrect post.
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