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Sheena Maskell Sheena Maskell
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7 years ago
Wilson Corporation granted an incentive stock option to Reva on January 1, two years ago. The option price was $300, and the FMV of the Wilson stock was also $300 on the grant date. The option allowed Reva to purchase 150 shares of Wilson stock. Reva exercised the option on August 1, this year, when the stock's FMV was $400. Unless otherwise stated, assume Reva is a qualifying employee. The results of the above transactions to Reva will be
A) no income to Reva on the grant date or exercise date but there is a tax preference item to Reva of $15,000.
B) no income tax or alternative minimum tax effect for Reva.
C) ordinary income to Reva on the exercise date of $15,000.
D) capital gain to Reva on the exercise date of $15,000.
Textbook 
Prentice Hall's Federal Taxation: 2011: Individuals

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
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Yoko900Yoko900
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