In 2010, BB granted an incentive stock option (ISO) to Mr. Yarnell to buy 8,000 shares of
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In 2010, BB granted an incentive stock option (ISO) to Mr. Yarnell to buy 8,000 shares of BB stock at $7 per share for 10 years. At date of grant, BB stock was trading on the AMEX for $6.23 per share. In 2019, Mr. Yarnell exercised the option when BB’s stock was trading at $22.81 per share.
a. How much income did Mr. Yarnell recognize in 2010 and 2019 because of the ISO?
b. Compute Mr. Yarnell’s basis in the 8,000 shares.
c. What are the tax consequences of the stock option to BB in 2010 and 2019?
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Related Book For
Principles Of Taxation For Business And Investment Planning 2020
ISBN: 9781259969546
23rd Edition
Authors: Sally Jones, Shelley Rhoades Catanach
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