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Subject:   Question
Date:   Thu, 17 Jan 2002
From:   Ed

Hello,

Do executive stock options generally have an expiration date that would cause the tranche to "expire worthless" if not exercised by that date?

Thanks,
Ed

Answer

Hello Ed,

I wasn't able to find the word "tranche" in my dictionary. Most options do have an expiration date, at which point the option will become worthless. Since there is generally no income when an option is granted, there is generally no tax consequence when the option expires.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.