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Author Question: Martin Corporation granted an incentive stock option to employee Caroline on January 1, 2012. The ... (Read 50 times)

cool

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on: Sep 13, 2020
Martin Corporation granted an incentive stock option to employee Caroline on January 1, 2012. The option price was $150, and the FMV of the Martin stock was also $150 on the grant date. The option allowed Caroline to purchase 160 shares of Martin stock. Caroline exercised the option on August 1, 2015 when the stock's FMV was $250. Unless otherwise stated, assume Caroline is a qualifying employee. If Caroline sells the stock on September 5, 2016 for $350 per share, she must recognize (ignore alternative minimum tax)
◦ 0. No gain or loss is recognized at exercise or sale with incentive stock options.
◦ long-term capital gain of $16,000 in 2016.
◦ ordinary income of $16,000 on the exercise date and a long-term capital gain of $16,000 in 2016.
◦ long-term capital gain of $32,000 in 2016.
Federal Taxation 2017 Individuals ¦ Pope, Rupert, Anderson ¦ 30th Edition
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Marked as best answer by cool on Sep 13, 2020

CAPTAINAMERICA

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Reply #1 on: Sep 13, 2020
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cool

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Reply 2 on: Sep 13, 2020
Wow, this really help

miss_1456@hotmail.com

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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