ISO Terms & Acronyms

Acq
Acquired

FMV
Fair market value

ISO
Incentive Stock Option

LTCG
Long-Term Capital Gain

Q
Quantity

QSBS
Qualified Small Business Stock

SHS
Share

STCG
Short-Term Capital Gain

YTD
Year to date

ISO Terms & Acronyms

2G1E

2 years from grant and 1 year from exercise.

409A

Official per share private company stock valuation

Alternative Minimum Tax (AMT Tax) / Form 6521

The AMT is a separate tax that is imposed in addition to your regular tax. Use Form 6251 to figure the amount, if any, of your alternative minimum tax (AMT). The AMT applies to taxpayers who have certain types of income that receive favorable treatment, or who qualify for certain deductions, under the tax law.

AMT Tax Credit / Form 8801 / The Minimum Tax Credit

The minimum tax credit is generally the amount of adjusted net minimum tax for all tax years reduced by the minimum tax credit for all prior tax years. Use Form 8801 if you are an individual, estate, or trust to figure the minimum tax credit, if any, for alternative minimum tax (AMT) you incurred in prior tax years and to figure any credit carryforward to next year

AMT Trigger Point

The taxpayer is subject to AMT if the tentative minimum tax exceeds the regular tax liability calculated on regular taxable income.

Bargain Value / AMT Spread

The difference between the grant price and the fair market value

Form 3921

Form 3921 is an IRS form that must be filed by a company when an employee has exercised an incentive stock option (ISO) in the last tax year

Incentive Stock Options (ISOs)

Incentive stock options (ISOs) are a form of equity compensation that allows you to buy company shares for a specific exercise price. ISOs are a type of stock option–they are not actual shares of stock; you must exercise (buy) your options to become a shareholder

Nonqualified Stock Options (NSOs)

Non-qualified Stock Options (NSOs) are stock options that, when exercised, result in ordinary income under US tax laws on the difference, calculated on the exercise date, between the exercise price and the fair market value of the underlying shares.

Sell to cover

Sell to cover refers to employees with stock options that are in the money cashing them in and then immediately selling a portion of the stock to cover the cost of buying them.

SS 1202 stock / QSBS

Section referring to Qualified Small Business Stock