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incentive stock options non-qualified stock options two types of employee stock options both have different grants tax and exercise implications this is going to be a very basic overview of the two these are the key takeaways that you need to understand about ISOs incentive stock options or sometimes referred to as ISOs and non-qualified options sometimes refer to as NSOs essentially with incentive stock options the key idea is there is a big tax implication in this case its a positive tax implication for the person receiving those options essentially these options dont qualify as ordinary income the reason being that if youve had the options for two years which is very common because most best in schedules are either three or four years long if its been two years from the date of grant and youve held the options for at least one year then any profits you make from selling those options are taxed at long-term capital gains rates they are not taxed at your personal income rate whi
