Beverly works for a large publicly traded company and regularly receives incentive stock options as bonuses.In the current year,Beverly exercises options to purchase 1,000 shares at $48 per share when the market value is $72 per share.What is Beverly's AMT adjustment from the exercise of the options?
A)$24,000.
B)$48,000.
C)$72,000.
D)None of these.

Question

Quizplus · Accepted Answer

The AMT adjustment for the exercise of incentive stock options is the difference between the fair market value of the stock on the exercise date and the option price multiplied by the number of shares exercised. In this case, the AMT adjustment would be ($72 - $48) x 1,000 = $24,000.

Beverly Works for a Large Publicly Traded Company and Regularly