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Financial Planning / Tax Strategies


Subject:  Incentive Stock Options Date:  1/25/2001  12:37 PM
Author:  tdel Number:  44812 of 129719

I know that if a person sells stock bought on an ISO before the one year holding period ends, the "spread" at the date of exercise is taxed as income.

My question is, how does the IRS know that the stock sold was purchased under an ISO? I know that the employee is supposed to notify the company if the stock is sold before the one-year holding period. Is this where the IRS gets informed?
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