ISO (Incentive Stock Option)
A type of stock option only available to employees that can qualify for lower long-term capital gains tax if you hold the shares long enough after exercising.
Quick Answer
Who is allowed to receive an ISO?
Only employees on a company's own payroll — advisors, contractors, and non-employee board members are legally excluded and can only receive NSOs instead, regardless of what the company might prefer to offer.
- Employment status, not seniority, determines eligibility
- Advisors and contractors always default to NSOs
- Misclassifying this can void the ISO's tax treatment entirely
The Lovie Advantage
Lovie tracks employment status against every option grant so ISO-only rules apply automatically, without someone checking manually.
See how this connects to NSO (Non-Qualified Stock Option). For the formal definition, see the IRS's Form 3921 guidance for incentive stock options.
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