Issue Recognition Problems Identify the tax issue or issues suggested by the following situations and state each issue in the form of a question.
Six years ago, Ms. PL paid $20 per share for 1,000 shares of her employer’s stock. This stock is now worth $58 per share. Ms. PL wants to exercise a stock option to buy 1,000 more shares at a strike price of $29 per share. Because she does not have $29,000 cash readily available, she has requested that the corporation allow her to exchange 500 of her original shares (valued at $29,000) for the 1,000 new shares.