Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share)at the time she started working when the stock price was $6 per share. When the share price was $15 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $20 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent?
A)$0 gain and $0 tax
B)$500 gain and $100 tax
C)$500 gain and $185 tax
D)$1,200 gain and $240 tax

Question

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The Answer of Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share)at the time she started working when the stock price was $6 per share. When the share price was $15 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $20 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent?
A)$0 gain and $0 tax
B)$500 gain and $100 tax
C)$500 gain and $185 tax
D)$1,200 gain and $240 tax

Maren Received 10 NQOs (Each Option Gives Her the Right