When stock options are taxed, both the corporation and employee receive a tax benefit. Stock options allow corporations to claim a deduction when the employees exercise their stock options. Likewise, employees of the corporation get the benefit of paying ordinary income taxes versus capital gains on their stock options.
See Peter L. Faber, "How Options Are Taxed" NYTimes.com, (Jan. 5, 2012).
Posted by EJ Antezana, Associate Editor, Wealth Strategies Journal
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