--- title: "RSU, Stock Option and ESPP Taxes: What to Check | DeepYield" description: How RSUs, NSOs, ISOs and ESPP shares are taxed, the AMT on ISOs, and the Form 1099-B basis check that keeps the same income from being taxed twice. --- [Skip to content](https://go.deepyield.com/learn/rsu-and-stock-option-taxes#main-content) [![DeepYield Tax Strategies Logo](https://go.deepyield.com/hs-fs/hubfs/1080x1080px-1.png?width=1001&height=1001&name=1080x1080px-1.png)Homepage](https://deepyield.com/) - Home - Products - Pricing - Blog - Company Get started - Home - Products - Pricing - Blog - Company Get started DEEPYIELDTAX STRATEGIES # RSUs, Stock Options and ESPP Shares: How They're Taxed and What to Check on Your Return **Short answer:** Equity pay is usually taxed in two steps: first as compensation (when RSU shares are delivered, usually at vesting; when nonstatutory options are exercised; or when ISO or ESPP shares are sold early or at a discount), and then as capital gain or loss when you sell the shares. The second step should only reach the change in value after the compensation part. That depends on your basis, and for grants after 2013 the basis on your broker's Form 1099-B doesn't include the compensation part. The 2025 Form 8949 instructions say that for compensatory options granted after 2013, the basis reported on Form 1099-B "won't reflect any amount you included in income upon grant or exercise of the option." If nobody adjusts it on Form 8949, the same income is taxed again as gain. ISOs can add one more layer: an alternative minimum tax (AMT) adjustment, generally in the year you exercise, unless you sell the shares that same year. Whether that adjustment leads to any AMT depends on the rest of your return. **[Request your free two-year look-back →](https://deepyield.com/get-started/#inv-form)** ### 1. The basis check: the same income shouldn't be taxed twice This is the first thing to check on any return that reports a sale of company stock. **What the IRS says about the 1099-B.** - The 2025 Form 8949 instructions: "For compensatory options granted after 2013, the basis information reported to you on Form 1099-B or Form 1099-DA (or substitute statement) won't reflect any amount you included in income upon grant or exercise of the option. Increase your basis by any amount you included in income upon grant or exercise of the option." - Publication 525 says the same for both nonstatutory and statutory options, and adds: "It's your responsibility to make any appropriate adjustments to the basis information reported on Form 1099-B by completing Form 8949." - The 2026 Form 1099-B instructions tell brokers they cannot increase initial basis for income recognized upon the exercise of a compensatory option or the vesting or exercise of other equity-based compensation arrangements granted or acquired after 2013. That covers RSU shares as well as options. - For options granted before 2014, Publication 525 says the 1099-B basis may or may not reflect the income, so it may need to be adjusted too. **Why it matters.** The compensation part of your equity pay shows up as wages, usually in box 1 of your W-2. Publication 525 says your basis in stock from a nonstatutory option "is the amount you pay for it plus any amount you included in income upon grant or exercise of the option." If the return uses the lower 1099-B basis instead, the compensation already taxed as wages is counted a second time as capital gain. In plain terms, that part of the income gets taxed twice. **How it's fixed on the return.** The Form 8949 instructions say that if you received a Form 1099-B and the basis shown in box 1e is incorrect, you enter code B in column (f). What goes in columns (e) and (g) depends on the box checked at the top of Form 8949. If the broker reported the basis to the IRS (box A or D), enter the basis shown on the 1099-B in column (e) even though it's incorrect, and correct the error with an adjustment in column (g). If it didn't (box B or E), enter the correct basis in column (e) and -0- in column (g). When the 1099-B basis is too low, as it usually is with equity pay, the instructions' Worksheet for Basis Adjustments in Column (g) makes that adjustment a negative number. The instructions' Example 4 shows the same steps for a basis that was too high. One more point from the same instructions: if all your 1099-Bs show basis reported to the IRS and no adjustment is needed, you may not need to file Form 8949. So a return that skipped Form 8949 for equity sales is worth a second look. What to check: for each sale of company stock, whether the basis on Form 8949 includes the amount that was taxed as wages, with code B, and either the correct basis in column (e) or a negative column (g) adjustment, where the 1099-B basis was too low. ### 2. RSUs (restricted stock units) An RSU is a promise to deliver shares later, usually when a vesting condition is met. Publication 525 mentions RSUs only in its discussion of the section 83(i) deferral election for certain private companies, so the general rules apply to the shares you receive: - **Income.** Publication 525 says that in most cases, if you receive property for your services, you must include its fair market value (FMV) in your income in the year you receive the property. The RSU itself isn't property for this purpose: the section 83 regulations exclude an unfunded and unsecured promise to pay money or property in the future. Section 83 applies to the shares once they're delivered to you, usually at or soon after vesting. Their value, minus anything you paid, is income when your rights in the shares are first transferable or no longer subject to a substantial risk of forfeiture. - **Basis.** Publication 551 says: "If you receive property for services, include the property's FMV in income. The amount you include in income becomes your basis." - **The 1099-B.** As in section 1, brokers can't add income from the vesting of equity-based compensation granted after 2013 to the basis they report. What to check: whether the basis used for sold RSU shares equals the value that was taxed as wages when the shares were delivered, usually at vesting, not just the amount you paid. ### 3. Nonstatutory stock options (NSOs) Publication 525 says nonstatutory options are the options granted neither under an ISO plan nor an employee stock purchase plan. - **Grant.** Most have no readily determinable value at grant. Then, per Publication 525, you don't have income until you exercise or transfer the option. - **Exercise.** You generally include the difference between what you pay and the stock's FMV when you exercise, or when the shares become substantially vested if they aren't vested at exercise. Publication 525 says your employer should report this income in box 12 of Form W-2 with code V, and include it in boxes 1, 3 (up to the social security wage base) and 5. - **Sale.** Your basis is the amount you paid plus any amount you included in income upon grant or exercise. That's the basis the 1099-B won't show for options granted after 2013. What to check: the code V amount on the W-2 for each exercise year, and whether that amount was added to basis when the shares were sold. ### 4. Incentive stock options (ISOs): the regular tax - **Grant and exercise.** Publication 525 says that for a statutory stock option, you don't include any amount in income when the option is granted or when you exercise it. Your employer should send Form 3921 for each ISO exercise, which Topic 427 says reports important dates and values needed to determine the correct amount of capital and ordinary income. - **Holding period.** You satisfy it if you don't sell the stock until the end of the later of the 1-year period after the stock was transferred to you or the 2-year period after the option was granted. Meet it, and the gain or loss is capital gain or loss, with a basis equal to what you paid. - **Other conditions.** Publication 525 says you must have been an employee of the company granting the option, or a related company, from the grant date until 3 months before you exercise (1 year if you're disabled); otherwise the option is a nonstatutory option. Separately, ISOs that first become exercisable in one calendar year are treated as nonstatutory options to the extent the stock's value at grant is over a limit set by statute. - **Disqualifying disposition.** If you sell sooner at a gain, Publication 525 says the gain is ordinary income up to the amount by which the stock's FMV when you exercised the option exceeded the option price. Any excess is capital gain. Your employer should report the ordinary income as wages in box 1 of Form W-2. If it isn't on a W-2, you report it on Schedule 1 (Form 1040), line 8k. For the capital gain part, your basis is the amount you paid plus the amount reported as wages. What to check: whether each ISO sale was correctly classed as meeting the holding period or not, and, for an early sale, whether the wage part was reported once and added to basis. ### 5. ISOs and the alternative minimum tax **The adjustment.** The 2025 Form 6251 instructions say that for the regular tax, no income is recognized when an ISO is exercised, but that rule doesn't apply for the AMT. Instead, you generally include on Form 6251, line 2i, the excess of the stock's FMV when your rights first become transferable or are no longer subject to a substantial risk of forfeiture, over the amount you paid. If you exercise and sell the stock in the same year, the regular tax and AMT treatment is the same and no adjustment is required. **Two bases.** You increase your AMT basis in the stock by the amount of the adjustment. Publication 525 says your AMT basis in ISO stock "is likely to differ from your regular tax basis," and to keep adequate records for both. When you later sell, the difference flows through Form 6251 (line 2k covers dispositions of property). **The credit.** The Form 6251 instructions say that if you pay AMT for 2025, you may be able to take a credit on Form 8801 for 2026. The Form 8801 instructions explain that the AMT comes from deferral items and exclusion items, and that the minimum tax credit is allowed only for the AMT caused by deferral items. Unused credit carries forward on Form 8801. The credit can be used only in a year when your regular tax, after certain credits, is more than your tentative minimum tax. Your CPA can sort out which items caused your AMT. What to check: Form 6251 in each ISO exercise year, the AMT basis records for those shares, and whether Form 8801 was filed in later years to claim or carry forward the credit. ### 6. What the 2025 tax law changed for the AMT Section 70107 of Public Law 119-21, commonly known as the One Big Beautiful Bill Act, changed the AMT exemption rules in section 55(d)(4), effective for tax years beginning after December 31, 2025: - **Higher exemption made permanent.** It struck the "and before January 1, 2026" end date. Rev. Proc. 2025-32 describes this as making the temporary increases of the exemption amounts and the phaseout threshold amounts permanent. - **Phaseout starts at a reset income level.** It changed the inflation adjustment for the phaseout threshold, so that amount is indexed from 2025, with no adjustment for tax years beginning before 2027. The 2026 phaseout threshold in Rev. Proc. 2025-32 is lower than the 2025 threshold in the Form 6251 instructions. - **Faster phaseout.** It doubled the phaseout rate, so above the threshold the exemption is reduced by twice as much for each dollar of income as before. The exemption amounts themselves are still adjusted for inflation; the IRS figures for 2026 are in Rev. Proc. 2025-32, section 4.10. These rules apply to ISO exercises in tax years beginning after December 31, 2025. ### 7. Employee stock purchase plan (ESPP) shares ESPP options are statutory options, so Publication 525 says there's no income at grant or at purchase. The tax shows up when you sell. The holding period is the same as for ISOs: you meet it if you don't sell the stock until the end of the later of the 1-year period after the shares were transferred to you or the 2-year period after the option was granted. - **Holding period met.** Your basis is the option price you paid. If the option was granted at a discount and you meet the holding period, Publication 525 says you include in income as compensation the lesser of (1) the excess of the share's FMV at grant over the option price, or (2) the excess of the FMV at sale over what you paid. Section 423(c) increases your basis by that amount, so any excess gain is capital gain. If you sell at a loss, Publication 525 says it's a capital loss and you have no ordinary income. - **Holding period not met.** Your ordinary income is the amount by which the stock's FMV when you exercised the option exceeded the option price, and this ordinary income isn't limited to your gain from the sale. Publication 525 says: "Increase your basis in the stock by the amount of this ordinary income." - **Forms.** Your employer should file Form 3922 if the option price was less than the stock's value on the grant date or wasn't fixed or determinable at grant. The Form 3922 instructions tie it to the first transfer of legal title to the shares, including a transfer into a brokerage account, so it can arrive for the year you bought the shares rather than the year you sold. Topic 427 says the form reports important dates and values needed to determine the correct amount of capital and ordinary income. What to check: whether the compensation part of each ESPP sale was reported once, as wages, and added to basis on Form 8949. ### 8. The four types side by side | Type | When compensation income is reported | Form to look for | Basis for the capital gain or loss | | --- | --- | --- | --- | | RSUs | When the shares are received (vesting or settlement) | W-2; broker statements | The value included in income | | Nonstatutory options | Usually at exercise | W-2, box 12, code V | Amount paid plus amount included in income | | ISOs | Not at grant or exercise for the regular tax; at sale if the holding period isn't met. AMT adjustment at exercise | Form 3921; Form 6251 | Amount paid, plus any wage amount from an early sale. A separate AMT basis | | ESPP shares | At sale (discount part, or the spread at purchase if the holding period isn't met) | Form 3922 | Option price paid, plus any ordinary income reported | ### 9. What to check on your last two returns - Every Form 1099-B with company stock sales, and any supplemental statement from the broker showing adjusted basis. - Form 8949: is code B in column (f) wherever the 1099-B basis left out income already taxed as wages, with the correct basis in column (e) or a negative adjustment in column (g), depending on whether the broker reported the basis to the IRS? - Your W-2s: box 1 and box 12 code V for option exercises and vesting, and whether ISO or ESPP ordinary income appeared there or on Schedule 1, line 8k. - Forms 3921 and 3922 from your employer, and your own records of grant, exercise and sale dates for the holding periods. - Form 6251 in any ISO exercise year, AMT basis records, and Form 8801 in the years after. - If you sold company shares to fund a ranch or land purchase, the same basis check applies to that sale. See our page on [tax questions to raise before buying a ranch](https://go.deepyield.com/learn/buying-a-ranch-tax-questions?hsLang=en). ### Where DeepYield fits DeepYield is a second set of eyes, not a replacement for your CPA. A free two-year look-back is a review of your last two years of tax returns, done for you, then a 30-minute call to walk through what we found. For equity pay, that starts with the basis check: whether the income already taxed on your W-2 was added back to basis on Form 8949, so it wasn't taxed again as gain. It also covers whether ISO exercises flowed through Form 6251 and whether any minimum tax credit was carried on Form 8801. We go looking for what's missing, and we share what we see with you and your CPA, who can review it line by line. Sometimes the review ends with nothing to change. Related: [Tax Planning for High-Income Earners](https://go.deepyield.com/learn/tax-planning-for-high-income-earners?hsLang=en) · [Can a Ranch Loss Offset Your W-2 Income? The IRS Limits That Apply, in Order](https://go.deepyield.com/learn/ranch-loss-and-w2-income?hsLang=en) · [The SALT Cap After the 2025 Tax Law: What Changed for High Earners and Landowners](https://go.deepyield.com/learn/salt-cap-2025-tax-law?hsLang=en) · [Charitable Giving Under the 2026 Rules: Bunching, Donor-Advised Funds and Gifts of Stock](https://go.deepyield.com/learn/charitable-giving-2026-rules?hsLang=en) · [Can You Get a Second Opinion on Your Tax Return?](https://go.deepyield.com/learn/second-opinion-on-your-tax-return?hsLang=en) · [What to Gather for a Tax Return Review](https://go.deepyield.com/learn/what-to-bring-to-a-tax-return-review?hsLang=en) · [Buying a Ranch or Farmland: Tax Questions to Raise Before Closing](https://go.deepyield.com/learn/buying-a-ranch-tax-questions?hsLang=en) **[Request your free two-year look-back →](https://deepyield.com/get-started/#inv-form)** ## Frequently asked questions ### Why does my Form 1099-B show the wrong basis for my company stock? Because brokers can't include the compensation part. The 2025 Form 8949 instructions say that for compensatory options granted after 2013, the basis on Form 1099-B "won't reflect any amount you included in income upon grant or exercise of the option." The Form 1099-B instructions say the same for the vesting or exercise of other equity-based compensation granted after 2013. You increase the basis yourself on Form 8949. ### Can stock compensation be taxed twice? It can if the basis isn't adjusted. The compensation part is taxed as wages. If the sale is then reported with the lower 1099-B basis, that same amount shows up again as capital gain. The Form 8949 instructions say to increase your basis by any amount you included in income and to enter code B in column (f). If the broker reported the basis to the IRS, the fix is a negative adjustment in column (g); if not, you enter the correct basis in column (e). ### How are RSUs taxed? Publication 525's general rule is that if you receive property for your services, you include its fair market value in income in the year you receive it. Publication 551 says the amount you include in income becomes your basis. When you sell the shares, the gain or loss is measured from that basis. ### Do I owe tax when I exercise an incentive stock option? Not for the regular tax. Publication 525 says you don't include any amount in income when you exercise a statutory stock option. For the AMT, though, the Form 6251 instructions say you generally include the excess of the stock's value over what you paid on Form 6251, line 2i, unless you sell the stock in the same year. ### What is a disqualifying disposition of ISO stock? A sale before the later of 2 years after the option was granted or 1 year after the stock was transferred to you. Publication 525 says the gain is then ordinary income up to the amount by which the stock's value at exercise exceeded the option price, and any excess is capital gain. ### Is there a credit for AMT paid because of an ISO exercise? There can be. The Form 6251 instructions say that if you pay AMT for 2025, you may be able to take a credit on Form 8801 for 2026. The Form 8801 instructions say the credit is allowed only for the AMT caused by deferral items, and unused credit carries forward. ### Did the 2025 tax law change the AMT? Yes. Section 70107 of Public Law 119-21 made the higher exemption amounts permanent, reset the income level where the exemption starts to phase out (Rev. Proc. 2025-32 shows a lower 2026 starting point than 2025), and doubled the rate at which the exemption phases out, for tax years beginning after December 31, 2025. ### How are ESPP shares taxed when I sell? It depends on the holding period. If you meet it and the option was granted at a discount, Publication 525 says part of the gain is compensation and the rest is capital gain. If you don't, your ordinary income is the spread at purchase, and Publication 525 says to increase your basis by that amount. Form 3922 reports the dates and values you need. ## Sources - Instructions for Form 8949 (2025), *Sales and Other Dispositions of Capital Assets* (Column (e) basis adjustments; How To Complete Form 8949, Columns (f) and (g), code B; Worksheet for Basis Adjustments in Column (g); Example 4): [https://www.irs.gov/instructions/i8949](https://www.irs.gov/instructions/i8949) - IRS Publication 525, *Taxable and Nontaxable Income* (2025) (Stock Options: Nonstatutory Stock Options; Statutory Stock Options; Employee stock purchase plan; Restricted Property): [https://www.irs.gov/publications/p525](https://www.irs.gov/publications/p525) - Instructions for Form 1099-B (2026) (basis of securities acquired through compensatory options and other equity-based compensation): [https://www.irs.gov/instructions/i1099b](https://www.irs.gov/instructions/i1099b) - IRS Publication 551, *Basis of Assets* (12/2025) (Property Received for Services): [https://www.irs.gov/publications/p551](https://www.irs.gov/publications/p551) - IRS Topic No. 427, *Stock options*: [https://www.irs.gov/taxtopics/tc427](https://www.irs.gov/taxtopics/tc427) - Instructions for Forms 3921 and 3922 (04/2025) (Specific Instructions for Form 3922): [https://www.irs.gov/instructions/i3921](https://www.irs.gov/instructions/i3921) - Instructions for Form 6251 (2025), *Alternative Minimum Tax, Individuals* (What's New; Line 2i, Exercise of Incentive Stock Options; Credit for Prior Year Minimum Tax): [https://www.irs.gov/instructions/i6251](https://www.irs.gov/instructions/i6251) - Instructions for Form 8801 (2025), *Credit for Prior Year Minimum Tax* (Purpose of Form; Specific Instructions): [https://www.irs.gov/instructions/i8801](https://www.irs.gov/instructions/i8801) - Rev. Proc. 2025-32, sections 3.07 and 4.10 (2026 AMT exemption and phaseout amounts): [https://www.irs.gov/pub/irs-drop/rp-25-32.pdf](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf) - Public Law 119-21, section 70107 (enacted text): [https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm) - 26 U.S.C. §53 (credit for prior year minimum tax liability) (U.S. Code, 2024 edition; not amended by P.L. 119-21): [https://www.govinfo.gov/link/uscode/26/53?link-type=html](https://www.govinfo.gov/link/uscode/26/53?link-type=html) - 26 U.S.C. §55 (alternative minimum tax; exemption phaseout) (U.S. Code, 2024 edition, before the P.L. 119-21 amendments described above): [https://www.govinfo.gov/link/uscode/26/55?link-type=html](https://www.govinfo.gov/link/uscode/26/55?link-type=html) - 26 U.S.C. §83 (property transferred in connection with services) (U.S. Code, 2024 edition; not amended by P.L. 119-21): [https://www.govinfo.gov/link/uscode/26/83?link-type=html](https://www.govinfo.gov/link/uscode/26/83?link-type=html) - 26 CFR 1.83-3(e) (meaning of property under section 83): [https://www.ecfr.gov/current/title-26/section-1.83-3](https://www.ecfr.gov/current/title-26/section-1.83-3) - 26 U.S.C. §422 (incentive stock options) (U.S. Code, 2024 edition; not amended by P.L. 119-21): [https://www.govinfo.gov/link/uscode/26/422?link-type=html](https://www.govinfo.gov/link/uscode/26/422?link-type=html) - 26 U.S.C. §423 (employee stock purchase plans) (U.S. Code, 2024 edition; not amended by P.L. 119-21): [https://www.govinfo.gov/link/uscode/26/423?link-type=html](https://www.govinfo.gov/link/uscode/26/423?link-type=html) *Results depend on your specific facts. No outcome is guaranteed. This is general information, not tax advice; advice is provided only under a signed engagement.* DeepYield LLC · 4306 Yoakum Blvd, Suite 170, Houston, TX 77006 [![DeepYield Tax Strategies Logo](https://go.deepyield.com/hs-fs/hubfs/1080x1080px-1.png?width=1001&height=1001&name=1080x1080px-1.png "DeepYield Tax Strategies Logo")](https://deepyield.com/) - Home - Products - Pricing - Blog - Company --- Privacy Policy · Legal · © 2026. All rights reserved. ```json { "@context" : "https://schema.org", "@id" : "https://go.deepyield.com/learn/rsu-and-stock-option-taxes#webpage", "@type" : "WebPage", "inLanguage" : "en-US", "name" : "RSU, Stock Option and ESPP Taxes: What to Check", "url" : "https://go.deepyield.com/learn/rsu-and-stock-option-taxes" } ``` ```json { "@context" : "https://schema.org", "@id" : "https://go.deepyield.com/learn/rsu-and-stock-option-taxes#article", "@type" : "Article", "about" : [ "Restricted stock units", "Nonstatutory stock options", "Incentive stock options", "Employee stock purchase plans", "Cost basis", "Form 8949", "Alternative minimum tax", "Form 8801" ], "author" : { "@id" : "https://deepyield.com/#organization", "@type" : "Organization", "name" : "DeepYield" }, "citation" : [ "https://www.irs.gov/instructions/i8949", "https://www.irs.gov/publications/p525", "https://www.irs.gov/instructions/i1099b", "https://www.irs.gov/publications/p551", "https://www.irs.gov/taxtopics/tc427", "https://www.irs.gov/instructions/i3921", "https://www.irs.gov/instructions/i6251", "https://www.irs.gov/instructions/i8801", "https://www.irs.gov/pub/irs-drop/rp-25-32.pdf", "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm", "https://www.govinfo.gov/link/uscode/26/53?link-type=html", "https://www.govinfo.gov/link/uscode/26/55?link-type=html", "https://www.govinfo.gov/link/uscode/26/83?link-type=html", "https://www.ecfr.gov/current/title-26/section-1.83-3", "https://www.govinfo.gov/link/uscode/26/422?link-type=html", "https://www.govinfo.gov/link/uscode/26/423?link-type=html" ], "dateModified" : "2026-10-21", "datePublished" : "2026-10-21", "description" : "How RSUs, NSOs, ISOs and ESPP shares are taxed, the AMT on ISOs, and the Form 1099-B basis check that keeps the same income from being taxed twice.", "headline" : "RSUs, Stock Options and ESPP Shares: How They're Taxed and What to Check on Your Return", "mainEntityOfPage" : { "@id" : "https://go.deepyield.com/learn/rsu-and-stock-option-taxes#webpage" }, "publisher" : { "@id" : "https://deepyield.com/#organization" } } ``` ```json { "@context" : "https://schema.org", "@id" : "https://go.deepyield.com/learn/rsu-and-stock-option-taxes#faq", "@type" : "FAQPage", "mainEntity" : [ { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Because brokers can't include the compensation part. The 2025 Form 8949 instructions say that for compensatory options granted after 2013, the basis on Form 1099-B \"won't reflect any amount you included in income upon grant or exercise of the option.\" The Form 1099-B instructions say the same for the vesting or exercise of other equity-based compensation granted after 2013. You increase the basis yourself on Form 8949." }, "name" : "Why does my Form 1099-B show the wrong basis for my company stock?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "It can if the basis isn't adjusted. The compensation part is taxed as wages. If the sale is then reported with the lower 1099-B basis, that same amount shows up again as capital gain. The Form 8949 instructions say to increase your basis by any amount you included in income and to enter code B in column (f). 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For the AMT, though, the Form 6251 instructions say you generally include the excess of the stock's value over what you paid on Form 6251, line 2i, unless you sell the stock in the same year." }, "name" : "Do I owe tax when I exercise an incentive stock option?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "A sale before the later of 2 years after the option was granted or 1 year after the stock was transferred to you. Publication 525 says the gain is then ordinary income up to the amount by which the stock's value at exercise exceeded the option price, and any excess is capital gain." }, "name" : "What is a disqualifying disposition of ISO stock?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "There can be. The Form 6251 instructions say that if you pay AMT for 2025, you may be able to take a credit on Form 8801 for 2026. The Form 8801 instructions say the credit is allowed only for the AMT caused by deferral items, and unused credit carries forward." }, "name" : "Is there a credit for AMT paid because of an ISO exercise?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Yes. Section 70107 of Public Law 119-21 made the higher exemption amounts permanent, reset the income level where the exemption starts to phase out (Rev. Proc. 2025-32 shows a lower 2026 starting point than 2025), and doubled the rate at which the exemption phases out, for tax years beginning after December 31, 2025." }, "name" : "Did the 2025 tax law change the AMT?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "It depends on the holding period. If you meet it and the option was granted at a discount, Publication 525 says part of the gain is compensation and the rest is capital gain. If you don't, your ordinary income is the spread at purchase, and Publication 525 says to increase your basis by that amount. Form 3922 reports the dates and values you need." }, "name" : "How are ESPP shares taxed when I sell?" } ] } ``` ```json { "@context" : "https://schema.org", "@id" : "https://deepyield.com/#organization", "@type" : "Organization", "name" : "DeepYield", "url" : "https://deepyield.com/" } ```