Question: Keesha receives incentive stock options ( ISOs ) with an exercise price equal to the FMV at the date of the grant of $ 2

Keesha receives incentive stock options (ISOs) with an exercise price equal to the FMV at the date of the grant of $22. Keesha exercises these options three years from the date of the grant when the FMV of the stock is $30. Keesha then sells the stock three years after exercising for $35. Which of the following statements is (are) true?
At the date of grant, Keesha will have ordinary income equal to $22.
At the date of exercise, Keesha will have W-2 income of $8.
At the date of sale, Keesha will have long-term capital gain of $13.
Keeshas employer will not have a tax deduction related to the grant, exercise or sale of this ISO by Shania.
Question 13 options:
3 only.
2,3, and 4.
3 and 4.
All of these statements are true (1-4).
1,2, and 4.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!