Nonqualifying stock option

An employee stock option that does not satisfy IRS qualifying rules and therefore is liable for taxation upon exercise .

Nonqualified Stock Option

Any employee stock option that does not meet with IRS requirements for preferential tax treatment.

nonqualifying stock option

An option to purchase stock that does not meet certain requirements established by the Internal Revenue Service for favorable tax treatment. Acting on a nonqualifying stock option results in taxable ordinary income on any gain made during the year the option is exercised.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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