CALIFORNIA FAMILY LAW
...Income Tax Matters
......Community Property: Assets
.........Employment/Retirement Benefits
............Stock Options
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Taxation of Stock Options.

Rules governing taxation and reporting of income and taxes on nonstatutory stock options and nonqualified deferred compensation plans transferred in a dissolution.

Stock options may be transferred to a former spouse incident to divorce without income being recognized by transferor upon transfer or exercise.

ISOs and NSOs may be transferred in c/p division with tax consequences flowing to recipient.

Transfer of c/p share of nonqualified stock options to nonemployee spouse is not a taxable event.