The employer may recognize a deductible expense for a nonqualified stock option in the same year that the employee will recognize ordinary income.
b.
The recipient of an Incentive Stock Option will generally have to report compensation income in the year that the option is received.
c.
For an Incentive Stock Option, once exercised, the stock must be held at least two years after the grant date and at least one year after the exercise date.
d.
Employee Stock Purchase Plans are a type of qualified stock option plan.
Choice "B" is correct. Generally there is no recognition of compensation expense with an Incentive Stock Option.Choices "d", "a", and "c" are incorrect as these are all true statements.
