Four years ago, Handcock Corporation granted 300 SARs to Maria as a bonus. Handcock's stock was worth

Question:

Four years ago, Handcock granted 300 SARs to Maria as a bonus. Handcock's stock was worth $20 a share on the date of grant. Maria exercises her SARs this year when the stock is worth $60 a share.
a. How much income should Maria have recognized in the year she received the SARs?
b. How much income does Maria recognize when she exercises the SARs?
c. If Maria is single and in the 28 percent marginal tax bracket, what is her after-tax cash flow from the exercise of the SARs?
d. Does Handcock get a tax deduction for the SARs and if yes, when and in what amount?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...