Question

On January 1, 2017 (the grant date), Ned, an employee with ABC Corporation, is issued one share of incentive stock option (ISO) from ABC Corporation with an exercise price of $20 (the current market price). On June 1, 2018, Ned exercises his option when the ABC stock price is $30. He later sold the stock on June 4, 2019 for $45.

What is the tax treatment in 2017?

What is the tax treatment in 2018?

What is the tax treatment in 2019?

Answer 1

1	Tax Treatment in 2017
	No Tax Liablilty Due because no Excise Option or Sold
2	Tax Treatment in 2018
	Excerise Price		$20
	ABC Stock Price		$30
	Alternatinve Minimum Tax paid on 2018				$10
3	Tax Treatment in 2019
	ABC Stock Price		$30
	Sold Stock Price		$45
	Alerantive Minimum Tax Paid on 2019				$15