Question

Bob was granted some incentive stock options in January 2013. He exercised them in March 2014...

Bob was granted some incentive stock options in January 2013. He exercised them in March 2014 for $20,000 (when the FMV of the stocks was $65,000) and sold them for $82,000 in December 2016. What is the tax consequence of the sale? What if he sold the stocks on the same day he exercised?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The tax treatment will be as under:

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Martin Corporation granted an incentive stock option to employee Caroline on January 1, 2013. The option...
Martin Corporation granted an incentive stock option to employee Caroline on January 1, 2013. 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, 2017, when the stock's FMV was $250. Unless otherwise stated, assume Caroline is a qualifying employee. If Caroline sells the stock on September 5, 2019, for $350 per share,...
Wilson Corporation granted an incentive stock option to Reva on January 1, 2018. The option price...
Wilson Corporation granted an incentive stock option to Reva on January 1, 2018. The option price was $300, and the FMV of the Wilson stock was also $300 on the grant date. The option allowed Reva to purchase 150 shares of Wilson stock. Reva exercised the option on August 1, 2020, when the stock's FMV was $400. Reva sells the stock on December 5, 2021 for $450 per share. Determine the amount and character(i.e., ordinary, LTCG or STCG) of income...
On March 1 of year 0, Judy was granted an incentive stock option (ISO) to purchase...
On March 1 of year 0, Judy was granted an incentive stock option (ISO) to purchase 50 shares of her employer’s stock for $10 per share. The FMV of the stock on the date of the grant was $12 per share. On May 1 of year 1, Judy exercised her option when the stock was selling for $15 per share. On July 1 of year 2, Judy sold all of the shares for $20 per share. What amount and character...
Berg Company adopted a stock-option plan on November 30, 2013, that provided that 76,200 shares of...
Berg Company adopted a stock-option plan on November 30, 2013, that provided that 76,200 shares of $6 par value stock be designated as available for the granting of options to officers of the corporation at a price of $9 a share. The market price was $12 a share on November 30, 2014. On January 2, 2014, options to purchase 28,370 shares were granted to President Tom Winter— 15,800 for services to be rendered in 2014 and 12,570 for services to...
On January 1, 2016, Webber Company granted 77,300 stock options to certain executives. The options are...
On January 1, 2016, Webber Company granted 77,300 stock options to certain executives. The options are exercisable no sooner than December 31, 2018, and expire on January 1, 2022. Each option can be exercised to acquire one share of $3 par common stock for $7. An option-pricing model estimates the fair value of the options to be $3 on the date of grant. If unexpected turnover in 2017 caused the company to estimate that 10% of the options would be...
Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options...
Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 60,000 $1 par common shares. The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model. Which is the correct entry to record the exercise of 90% the...
Drugs offers an incentive stock option plan to its employees. On January 1, 2021, options were...
Drugs offers an incentive stock option plan to its employees. On January 1, 2021, options were granted for 80,000 $1 par common shares. The exercise price equals the $6 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model. Which is the correct entry to record the exercise of 96% of the...
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January...
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 64 million $1 par common shares. The exercise price is the market price on the grant date—$6 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 64 million options, estimated by an appropriate option pricing model, is $1 per option. Required: 1. Determine the total compensation...
Wall drugs offered an incentive stock option plan to its employees. On January 1, 2018, options...
Wall drugs offered an incentive stock option plan to its employees. On January 1, 2018, options were granted for 60,000 common share (par value $0.01). The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2021, and expire on December 31, 2022. Each option has a fair value of $1 based on an option-pricing model. a. Provide the journal entry required for January 1, 2018. Write...
On January 1, 2016, Adams-Meneke Corporation granted 60 million incentive stock options to division managers, each...
On January 1, 2016, Adams-Meneke Corporation granted 60 million incentive stock options to division managers, each permitting holders to purchase one share of the company’s $1 par common shares within the next six years, but not before December 31, 2018 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $44 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Required:...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT