On January 22, 2012, Dalton Corporation granted Kathleen an option to acquire 1,500 shares of the company's stock for $7 per share. The fair market price of the stock on the date of grant was $13. The stock requires that Kathleen remain with the company for one year after the date of exercise. The option did not have a readily ascertainable fair market value. Kathleen exercises the option on August 10, 2013, when the fair market value of the stock is $17. She makes a Section 83 b) election at the exercise date. On August 10, 2014, the fair market value of the stock is $23 per share. How much must she report as income in 2013 and 2014

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The Answer of On January 22, 2012, Dalton Corporation granted Kathleen an option to acquire 1,500 shares of the company's stock for $7 per share. The fair market price of the stock on the date of grant was $13. The stock requires that Kathleen remain with the company for one year after the date of exercise. The option did not have a readily ascertainable fair market value. Kathleen exercises the option on August 10, 2013, when the fair market value of the stock is $17. She makes a Section 83 b) election at the exercise date. On August 10, 2014, the fair market value of the stock is $23 per share. How much must she report as income in 2013 and 2014

On January 22, 2012, Dalton Corporation Granted Kathleen an Option