IRC §422 · ISO vs NSO

Stock Option Tax Calculator

Exercising options? See the ordinary, AMT, and capital-gains hit side by side.

Number of shares

Strike price (grant)

FMV at exercise

Expected sale price

Grant date

Exercise date

Expected sale date

Marginal ordinary rate

Tax Picture at Exercise + Sale

Bargain element (FMV − strike)

$100,000

NSO ordinary tax on exercise (W-2)

$24,000

ISO AMT preference (28% est.)

$28,000

Qualifying disposition (ISO)?

Cap gain at sale (NSO)

Cap gain at sale (ISO qualifying)

ISO qualifying disposition per §422(a): hold >2 yrs from grant AND >1 yr from exercise. Failing either = disqualifying disposition (ordinary income on bargain element).

Talk to a preparer about your option exercise

2024 AMT exemption: $85,700 single / $133,300 MFJ (§55(d)). ISO no regular tax on exercise per §421/§422. Educational tool, not legal advice. Call 689-331-5723 or email info@zerofusstaxes.com.