statutory option stock

(3) Special rule where incentive stock is acquired through use of other statutory option stock (A) Nonrecognition sections not to apply If— (i) there is a transfer of statutory option stock in connection with the exercise of any incentive stock option, and (ii) the applicable holding period requirements (under section 422(a)(1) or 423(a)(1) ) are not met before such transfer, then no section referred to in subparagraph (B) of paragraph (1) shall apply to such transfer. (B) Statutory option stock For purpose of subparagraph (A), the term “statutory option stock” means any stock acquired through the exercise of an incentive stock option or an option granted under an employee stock purchase plan.


26 USC § 424(c)(3)

Scoping language

None identified, default scope is assumed to be the parent (part II) of this section.
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