Question

In 2015, Grouper Corporation, a publicly traded corporation, granted to Sue Ackerman options to buy 1,000 shares of the corporation's stock at a strike price of $50 per share. On the date the options were granted, the market price of the stock was $50 per share.

Sue's accountant estimates that the stock options had a value of approximately $6 each on the day they were granted to her.

How much taxable income is Sue Ackerman required to report on her 1040 in the year the options were granted?

		$0
		$6,000
		$25,000
		$50,000

Answer 1

Sue Ackerman buys a stock call option for Grouper Corporation's 1000 publically traded stocks at a option margin of $6 per stock at a strike price and market price of $50 per shares.

Accoring to me Sue Ackerman, would be required to maintain a taxable income of $50,000, as Sue Ackerman is required to payoff $50,000 inorder to excersice the option of buying the Grouper Corporation stocks at the strike price on a future date when there is lot of contingency involved regarding the increase and decrese in market price f the stock.

Accoring to me, $6 per share is only the option margin which Sue ckerman has to pay to the option writer inorder to get the benefit of buying the stock of Grouper Corporation at the strike prie of $50 per share on the expiry of the option at the future date. Hence, taxabe income cannot be only $6000, as the actual price of the option is $50,000 + margin money