On May 10, 2016, Rafter Corporation granted Peter an option to acquire 500 shares of the company's stock for $10 per share. The fair market price of the stock on the date of grant was $12. The fair market value of the option at the date of grant was $3. Peter exercises the option on July 1, 2018, when the fair market value of the stock is $20. How much income must Peter report at the date of exercise?
A)$-0-
B)$1,200
C)$1,800
D)$3,600
E)$5,400

Question

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The Answer of On May 10, 2016, Rafter Corporation granted Peter an option to acquire 500 shares of the company's stock for $10 per share. The fair market price of the stock on the date of grant was $12. The fair market value of the option at the date of grant was $3. Peter exercises the option on July 1, 2018, when the fair market value of the stock is $20. How much income must Peter report at the date of exercise?
A)$-0-
B)$1,200
C)$1,800
D)$3,600
E)$5,400

On May 10, 2016, Rafter Corporation Granted Peter an Option