Martin Corporation Granted a Nonqualified Stock Option to Employee Caroline $$\begin{array} { | l | l | } \hline 2016 & 2017 \\\hline\$ 100,000 \text { ordinary income } & \$ 50,000 \text { LTCG } \\\hline \end{array}$$

Martin Corporation granted a nonqualified 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 1,000 shares of Martin stock. The option itself does not have a readily ascertainable FMV. Caroline exercised the option on August 1, 2016 when the stock's FMV was $250. If Caroline sells the stock on September 5, 2017 for $300 per share, she must recognize

A) $$\begin{array} { | l | l | } \hline 2016 & 2017 \\\hline\$ 100,000 \text { ordinary income } & \$ 50,000 \text { LTCG } \\\hline \end{array}$$
B) $$\begin{array} { | l | l | } \hline 2016 & 2017 \\ \hline0 & \$ 150,000 \text { LTCG } \\\hline\end{array}$$
C) $$\begin{array} { | l | l | } \hline 2016 & 2017 \\\hline\$ 100,000 \text { ordinary income } & \$ 50,000 \text { ordinary income } \\\hline \end{array}$$
D) $\begin{array}{|l|l|}\hline2016 & 2017 \\\hline 0 & \$ 150,000 \text { ordinary income }\\\hline\end{array}$