In 2014 Martinez Corporation granted nonqualified stock options to Shawn to buy 1,000 shares of Martinez stock at $15 per share exercisable for six years. At the date of grant, the stock was selling for $10 per share. In 2016 Shawn exercises the options when the market price is $40 per share. In 2017, Shawn sells the 1,000 shares of stock for $42 per share. How much is the deduction that Martinez Corporation is allowed and in which year?
A) $5,000 in 2014
B) $10,000 in 2014
C) $25,000 in 2016
D) $27,000 in 2017
Correct Answer:
Verified
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