On January 3,2013,Great Spirit Inc.,grants Jordan a nonqualified stock option to acquire 1,000 shares of the company's stock for $12 per share.The fair market price of the stock on the date of grant is $15.The option does not have a readily ascertainable fair market value.On October 1,2013,when the fair market value of the stock is $18,Jordan exercises the stock option.Determine the tax consequences for Jordan and Great Spirit Inc.,on the grant date of the option and the exercise date.

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The Answer of On January 3,2013,Great Spirit Inc.,grants Jordan a nonqualified stock option to acquire 1,000 shares of the company's stock for $12 per share.The fair market price of the stock on the date of grant is $15.The option does not have a readily ascertainable fair market value.On October 1,2013,when the fair market value of the stock is $18,Jordan exercises the stock option.Determine the tax consequences for Jordan and Great Spirit Inc.,on the grant date of the option and the exercise date.