USA Stock Option Payout

[AGH the CPA]

We had an employee retire; we cut him a check (outside of payroll) for his stock options. How do we report this on the 1099? Box 3?

 

[Drmdcpa]

Huh?

 

[Warren Scaman]

if its an incentive stock option and the sell it before the time 12 months , it added to wages and it a deduction on the company's tax return .

Can you tell more about this ?

 

[Drmdcpa]

If it is an ISO you have to hold for a year and a day, otherwise it is ordinary compensation.