On May 5, 2016, Elton Corporation Granted Germaine an Option

On May 5, 2016, Elton Corporation granted Germaine an option to acquire 100 shares of the company's stock for $8 per share. The fair market price of the stock on the date of grant was $14. The stock requires that Germaine remain with the company for one year after the date of exercise. The option did not have a readily ascertainable fair market value. Germaine exercises the option on June 12, 2017, when the fair market value of the stock is $18. On June 12, 2018, the fair market value of the stock is $21 per share. How much must he report as income in 2017 and 2018?
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2017 2018

A) $1,000 $300
B) $1,000 $-0-
C) $ 400 $-0-
D) $-0- $1,300