Which of the following statements regarding nonqualified stock options (NQOs)is false?
A)Book-tax differences associated with NQOs may be either permanent or temporary.
B)If the initial estimated value of the options that are exercised during the year is greater than the bargain element of those options,the book-tax difference for that year is unfavorable.
C)If the initial estimated value of the options that are exercised during the year is greater than the bargain element of those options,the book-tax difference for that year is entirely temporary.
D)None of the choices are false (all of the choices are true).

Question

Quizplus · Accepted Answer

The statement "If the initial estimated value of the options that are exercised during the year is greater than the bargain element of those options, the book-tax difference for that year is entirely temporary" is false. The book-tax difference may be permanent or temporary in this situation, depending on various factors such as the company's tax rate and the individual's tax situation. Therefore, choice C is false.

Which of the Following Statements Regarding Nonqualified Stock Options (NQOs)is