Glossary A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | 1 | 3 | 4 | 5 Definitions by InvestorWords.com   What is...? Disqualifying Disposition Participants in employee stock purchase plans and holders of ISO shares are eligible for some tax benefits on the sale of their stock, provided they satisfy requirements governing holding periods. When you sell or transfer the stock without satisfying the holding-period requirements, the sale will result in a disqualifying disposition-which, as the name implies?means the proceeds of your sale do not qualify for preferential tax treatment by the IRS. When you sell or otherwise transfer or exchange the stock that you acquired via an ESPP purchase or ISO grant and have met the holding period requirements, your sale will result in a qualifying disposition-meaning that your proceeds qualify for special tax treatment under the Internal Revenue Service code Note: Because you usually pay taxes on restricted stock when it vests, the information above does not apply to restricted stock. Copyright ©2009 by InvestorGuide.com. All Rights Reserved.