A bill to amend the Internal Revenue Code of 1954 with respect to the income tax treatment of incentive stock options.

Summary

Amends the Internal Revenue Code to exempt from income taxation any income resulting from the transfer of stock to an individual exercising a stock option under an incentive stock option plan. Specifies that the optionee may not dispose of stock within two years after an option is granted nor within one year after the transfer of shares. Requires that the optionee be an employee of the corporation granting such option at all times during the period after an option is granted and for three months after such option is exercised. Defines "incentive stock option" as an option granted to an individual in connection with employment by a corporation to purchase stock of such corporation. Sets forth the following conditions for the granting of such options: (1) approval of a plan for granting options by the shareholders of the corporations; (2) the granting of options within ten years of either the adoption or approval of the plan; (3) the termination of the option after ten years; (4) an option price which is not less than the fair market value of the stock subject to such option; (5) the nontransferability of the option; and (6) the optionee may not hold more than ten percent of the stock of the corporation, unless the option price is at least 110 percent of the fair market value of the stock subject to the option and such option is terminable five years after it is granted.

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Timeline

1. 5 March 1981

   Committee

   Subcommittee on Taxation and Debt Management took the following actions.

   Source: Committee

2. 5 March 1981

   Introduced

   Read second time and referred to Senate Committee on Finance.

   Source: IntroReferral

3. 5 March 1981

   Introduced

   Introduced in Senate

   Source: IntroReferral

4. 10 March 1981

   Committee

   Committee on Finance requested executive comment from OMB; Treasury Department.

   Source: Committee

5. 8 May 1981

   Committee

   Subcommittee on Taxation and Debt Management. Hearings held.

   Source: Committee

Votes

No vote records are attached yet.

Versions

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Documents

1 official file

• Introduced in Senate

  summary · EN · 5 March 1981

  Open at official source

Sponsors

• Sen. Packwood, Bob [R-OR] · R · Sponsor
• Sen. Bentsen, Lloyd M. [D-TX] · D · Sponsor
• · ssfi00 · Standing

Related records

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