On September 15,2013,Spiral Corporation grants Jay an option to acquire 250 shares of the company's stock for $10 per share.The fair market price of the stock on the date of grant is $14.The option does not have a readily ascertainable fair market value.How much must Jay report as income at the date of grant?
A)$ -0-
B)$1,000
C)$2,500
D)$3,500

Question

Quizplus · Accepted Answer

Since the option does not have a readily ascertainable fair market value, Jay does not have to report any income at the date of grant. Income is typically recognized when the option is exercised.

On September 15,2013,Spiral Corporation Grants Jay an Option to Acquire