DOUGLAS STIRLING Financial Advisor Stirling Wealth Management Forbes BEST-IN-STATE WEALTH ADVISORS EARCH WHAT ARE INCENTIVE STOCK OPTIONS (ISOS)? ISOS are a form of stock option that employers can grant to employees. A stock option is a right to buy a specified number of the company's shares at a specified price for a certain period of time. ISOs are also known as qualified or statutory stock options because they must conform to specific requirements under the tax laws to qualify for preferential tax treatment. THE TAX LAW REQUIREMENTS FOR ISOS INCLUDE: . The strike price - the price you will pay to purchase the shares, must be at least equal to the stock's fair market value on the date the option is issued To receive options, you must be an employee of the issuing company The exercise date cannot be more than 10 years after the grant Special rules may also apply if you own more than 10 percent of your employer's stock (by vote). Once you have been granted a stock option, you can buy the stock at the strike price even if the value of the stock has increased. If you choose to exercise a stock option, you must buy the stock within the specific time frame that was set when the option was purchased or granted to you. You are not required to exercise a stock option. Employers offer ISOs to reward employees' performance, encourage longevity with the company, and give employees a stake in the company's success. The other type of employee stock options are nonqualified stock options, which receive different tax treatment than ISOs. Your options may be subject to a vesting schedule developed by the company. Unvested options cannot be exercised until some date in the future, which often is tied to your continued employment. The stock that you receive upon exercise of an option may also be subject to a vesting schedule. Assuming that a stock option satisfies the tax law requirements for an ISO, preferential tax treatment will be available for the sale of the stock acquired upon the exercise of the ISO, but only if the stock is held for a minimum holding period. The holding period determines if a sale of the stock you received through the exercise of an ISO is subject to taxation as ordinary income or as capital gain or loss. To receive long-term capital gain treatment, you must hold the shares you acquired upon exercise of the option for at least two years from the date you were granted the option, and at least one year after the date that you exercised the option. Contact us if you would like to learn more about your stock options and how they can help you to reach your financial goals. Prepared by Broadridge Advisor Solutions Copyright 2023. Janney Montgomery Scott LLC Financial Advisors are available to discuss all considerations and risks involved with various products and strategies presented. We will be happy to provide a prospectus, when available, and other information upon request. Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. STIRLING WEALTH MANAGEMENT at Janney Montgomery Scott LLC Janney Stirling Wealth Management at Janney Montgomery Scott LLC 2200 Georgetowne Drive, Suite 400, Sewickley, PA 15143 www.stirlingwealthmanagement.com 1 724.934.2953 JANNEY MONTGOMERY SCOTT LLC MEMBER NYSE, FINRA, SIPC REF 1194212-0923 Douglas W. Stirling | EVP / Wealth Management, Financial Advisor W. Wallace Danforth | VP/Wealth Management, Financial Advisor Joe Kennedy | Financial Advisor Janney Montgomery Scott LLC is a member of the New York Stock Exchange, Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. For more information about Janney, please see Janney's Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest. adno-303566 DOUGLAS STIRLING Financial Advisor Stirling Wealth Management Forbes BEST - IN - STATE WEALTH ADVISORS EARCH WHAT ARE INCENTIVE STOCK OPTIONS ( ISOS ) ? ISOS are a form of stock option that employers can grant to employees . A stock option is a right to buy a specified number of the company's shares at a specified price for a certain period of time . ISOs are also known as qualified or statutory stock options because they must conform to specific requirements under the tax laws to qualify for preferential tax treatment . THE TAX LAW REQUIREMENTS FOR ISOS INCLUDE : . The strike price - the price you will pay to purchase the shares , must be at least equal to the stock's fair market value on the date the option is issued To receive options , you must be an employee of the issuing company The exercise date cannot be more than 10 years after the grant Special rules may also apply if you own more than 10 percent of your employer's stock ( by vote ) . Once you have been granted a stock option , you can buy the stock at the strike price even if the value of the stock has increased . If you choose to exercise a stock option , you must buy the stock within the specific time frame that was set when the option was purchased or granted to you . You are not required to exercise a stock option . Employers offer ISOs to reward employees ' performance , encourage longevity with the company , and give employees a stake in the company's success . The other type of employee stock options are nonqualified stock options , which receive different tax treatment than ISOs . Your options may be subject to a vesting schedule developed by the company . Unvested options cannot be exercised until some date in the future , which often is tied to your continued employment . The stock that you receive upon exercise of an option may also be subject to a vesting schedule . Assuming that a stock option satisfies the tax law requirements for an ISO , preferential tax treatment will be available for the sale of the stock acquired upon the exercise of the ISO , but only if the stock is held for a minimum holding period . The holding period determines if a sale of the stock you received through the exercise of an ISO is subject to taxation as ordinary income or as capital gain or loss . To receive long - term capital gain treatment , you must hold the shares you acquired upon exercise of the option for at least two years from the date you were granted the option , and at least one year after the date that you exercised the option . Contact us if you would like to learn more about your stock options and how they can help you to reach your financial goals . Prepared by Broadridge Advisor Solutions Copyright 2023. Janney Montgomery Scott LLC Financial Advisors are available to discuss all considerations and risks involved with various products and strategies presented . We will be happy to provide a prospectus , when available , and other information upon request . Janney Montgomery Scott LLC , its affiliates , and its employees are not in the business of providing tax , regulatory , accounting , or legal advice . These materials and any tax - related statements are not intended or written to be used , and cannot be used or relied upon , by any taxpayer for the purpose of avoiding tax penalties . Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor . STIRLING WEALTH MANAGEMENT at Janney Montgomery Scott LLC Janney Stirling Wealth Management at Janney Montgomery Scott LLC 2200 Georgetowne Drive , Suite 400 , Sewickley , PA 15143 www.stirlingwealthmanagement.com 1 724.934.2953 JANNEY MONTGOMERY SCOTT LLC MEMBER NYSE , FINRA , SIPC REF 1194212-0923 Douglas W. Stirling | EVP / Wealth Management , Financial Advisor W. Wallace Danforth | VP / Wealth Management , Financial Advisor Joe Kennedy | Financial Advisor Janney Montgomery Scott LLC is a member of the New York Stock Exchange , Financial Industry Regulatory Authority and the Securities Investor Protection Corporation . For more information about Janney , please see Janney's Relationship Summary ( Form CRS ) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest . adno - 303566