Wade Inc. granted a non-qualified stock option for 100 shares at $50 per share to Mary, an employee, on May 1, Year 1. On that date, the option was selling on an established market for $4 per share. Mary exercised the option on August 2, Year 2, when the FMV was $80 per share. She sold the stock on September 2, Year 3, for $100 per share. How much gross income and what type did Mary recognise in Year 1, 2, and 3?

Answer rating: 100% (QA)

Mary would recognize gross income and different types of income in Year 1 2 and 3 due to the nonqual... View the full answer