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Can you extend the life of an ISO plan past 10 years?

Hi Everyone - What are the tax implications if options in an ISO plan are given a longer than 10 year life? I assume the plan therefore changes from an ISO to an non-qualified plan. (I assume there are no GAAP implications unless the decision is made to cancel and re-grant options under a new ISO plan). I've never seen this issue before, any insights appreciated - it's primarily a tax question - thanks


Lyle Newkirk
Title: CFO
Company: Corrigo Incorporated
(CFO, Corrigo Incorporated) |

I am pretty sure that you cannot do this legally. You should ask counsel but I think it is a requirement that ISOs expire in ten years.
You could grant new ISOs upon expiration of the old ones and those would carry the same accounting treatment as other new ISOs.

Title: Audit
Company: CPA Firm
(Audit, CPA Firm) |

thanks Lyle, I'm pretty sure you're correct. has to be 10 years to be an ISO plan. thanks for your response, I think this more of a legal question than accounting.


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