How are excercised ISOs taxed?

[Guest cinder]

I recently excercised 850 stock options for a capital gain of 9500.00 I am in the 15% tax bracket. They were issued at an option price of 9.00 in July of 1998 and sold on 1/6/00.

Will they be a short or long term gain for tax purposes?

Is there a grace period for reinvesting this money whereas I will not be charged capital gains tax?

This is all new to me.

[Guest]

Sounds like you made a "disqualifying disposition" and you have ordinary income and perhaps a little short-term capital gain.

Go visit www.fairmark.com for the best info on the web relating to the tax treatment of stock options.