Four years ago, Acnex Inc. granted Ms. Cardena an incentive stock option (ISO) to purchase 1,000 shares of Acnex stock at $44 per share. On date of grant, the market price was $42 per share. This year, Ms. Cardena exercised the ISO when the market price was $75 per share. Which of the following statements is true?
A) Ms. Cardena recognizes $31,000 ordinary income, and Acnex is allowed a $31,000 deduction this year.
B) Ms. Cardena recognizes $31,000 ordinary income, but Acnex is allowed no deduction this year.
C) Ms. Cardena recognizes no ordinary income, and Acnex is allowed no deduction this year.
D) Ms. Cardena recognizes no ordinary income, but Acnex is allowed a $31,000 deduction this year.
Correct Answer:
Verified
Q62: On June 30, 2016, Kelso Inc., a
Q63: Six years ago, HOPCO granted Mr. Sing
Q64: An employee receives $110,000 of group term
Q65: On June 30, 2016, Gruen Inc. issued
Q66: This year, Nilo Inc. granted nonqualified stock
Q68: This year, Nilo Inc. granted incentive stock
Q69: Six years ago, HOPCO granted Ms. Cardena
Q70: Six years ago, Linus Corporation granted Pauline
Q71: Which of the following statements regarding fringe
Q72: Tony's marginal income tax rate is 24%,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents