A few years ago, Mr. B's employer gave him options to purchase 1,200 shares of the employer's

Fantastic news! We've Found the answer you've been seeking!

Question:

A few years ago, Mr. B's employer gave him options to purchase 1,200 shares of the employer's stock at $32 per share. At the time, the shares were trading at $30 per share. The employer is a public company. In April 2020 Mr. B is using options. Currently, the shares are trading at $38 per share. In July 2021, Mr B sells the shares at $46 per share.

Required:

Determine the tax impact of transactions in 2020 and 2021 on Mr. B's Net Income for Tax Purposes (NIFTP) and Taxable Income.

Show the exact calculation in your Excel. Round your answers to the nearest dollar amount. Include the following figures in your calculations:

2020: Impact on NIFTP and Taxable income

2021: Impact on NIFTP and Taxable income If the option price was $28, how would this affect the tax impact of 2020 (NIFTP and Taxable income)? (Explain the changes, there is no need for numerical analysis.) Also, enter the capital gain amount for 2021, if any, in the box