The benefit is clear. You get the opportunity to buy stock at a fixed price that is lower than market value. This provides instant growth in your investment. Since NSO's are not tax-advantaged, however, it is important to consider the tax ramifications of utilizing them.
You Won't Be Taxed on the Grant Date
Since all you actually own on the grant date is the option to purchase stock down the road, there isn't any income yet to tax. You are just being granted an option that, in most cases, won't be vested yet. And, even once fully vested there, you have still not reached a taxable event. The first taxable event comes when you exercise your options to purchase...
Advisory services offered through Wealth Enhancement Advisory Services, LLC (WEAS), a registered investment advisor. Certain, but not all, investment advisor representatives (IARs) of WEAS are also registered representatives of and offer securities through LPL Financial, member FINRA/SIPC. Wealth Enhancement Group and WEAS are separate entities from LPL. Wealth Enhancement Group is a registered trademark of Wealth Enhancement Group, LLC.
This site has been published for residents of: AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MI, MN, MO, MS, MT, NC, ND, NH, NE, NJ, NM, NV, NY, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WY ONLY. By entering, you certify that you are a resident of one of these states. All information herein has been prepared solely for information purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security.