Governor Deval Patrick's Budget Recommendation - House 1 Fiscal Year 2014

1.102 -Treatment of Incentive Stock Options

Item DescriptionFY2012 FY2013 FY2014
1.102 Treatment of Incentive Stock Options
Massachusetts has adopted the federal rules for employee stock options. Generally, employers may offer employees options to purchase company stock at a later date at a price equal to the fair market value of the stock when the option was granted. At the time employees exercise the option, they do not include in income the difference between the fair market value and the price they pay. If they later sell the stock, they are taxed on the amount by which the price they receive for the stock exceeds the price they paid. Thus, income is deferred and is taxed as a capital gain instead of as compensation.

Origin:  IRC S. 421-425
Estimate:  N.A.
N.A. N.A. N.A.


IRCFederal Internal Revenue Code (26 U.S.C.)
U.S.C United States Code
M.G.L. Massachusetts General Laws
Rev. Rul.; C.B. Revenue Ruling; Cumulative Bulletin of the U.S. Treasury
ESTIMATES All estimates are in $ millions.

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