On June 1,2017,Sutton Corporation grants Anne an option under its nonqualified stock option plan to acquire 300 shares of the company's stock for $12 per share.The fair market price of the stock on the date of grant is $18.The fair market value of the option is $4.How much must Anne report as income at the date of grant?
A)$-0-
B)$1,200
C)$1,800
D)$3,600
E)$5,400

Question

Quizplus · Accepted Answer

Anne must report the fair market value of the option as income at the date of grant, which is $4 per option. For 300 shares, this amounts to $1,200 (300 shares x $4 per share).

On June 1,2017,Sutton Corporation Grants Anne an Option Under Its