Options Trading Tutorial

Very hard Non-qualified stock question?

for non-qualified stock options, what are the rules regarding what portion is ordinary income and what portion of it is capital gain portion. If possible, include references where it may be stated.

Public Comments

1. It's all ordinary income if you exercise for cash. If you exercise for shares, and hold the shares for one year, than the portion used to buy shares below market value is ordinary income, and the portion of gain from the difference in stock price post purchase (if held for one year) is 15%