80-244, the IRS ruled on the tax consequence of exchanging previously acquired qualified stock options
in payment for the exercise of nonqualified stock options.
The Bureau of Labor Statistics' survey on 1999 option grants found that 78% of all employees granted stock options in 1999 received nonqualified stock options, and only 31% received qualified stock options
. (The overlapping percentage, 9%, is because some employees received both types.) The divergence is even greater when the sample was limited to responses from corporations with more than 100 employees (85% vs.
Hence, rules of administrative convenience (such as those set forth in Notice 2001-73, relating to the deposit of taxes in respect of the exercise of qualified stock options
) should be provided to address the deposit of employment tax liability.
"Incentive stock options are sometimes called statutory stock options, sometimes called qualified stock options
-- same thing.
Books worth referencing include Consider Your Options; Employee Stock Options: A Strategic Planning Guide for the 21st Century Optionaire; and Stock Options: An Authoritative Guide to Incentive and Non qualified Stock Options