Question: Problem 12-34 (Algorithmic) (LO. 3) In 2021, Reya exercised an incentive stock option that had been granted to her in 2019 by her employer, Weather

Problem 12-34 (Algorithmic) (LO. 3) In 2021, Reya exercised an incentive stock option that had been granted to her in 2019 by her employer, Weather Corporation. Reya acquired 100 shares of Weather stock for the option price of $6,900 per share. The rights in the stock become freely transferable and not subject to a substantial risk of forfeiture in 2021. The fair market value of the stock at the date of exercise was $8,200 per share. Reya sells the stock for $11,700 per share later in 2023. If an amount is zero, enter "O". a. What is the amount of Reya's AMT adjustment in 2021? What is her recognized gain on the sale for regular tax and for AMT purposes in 2023? In 2021, Reya has a $ and $ AMT adjustment of $ Her recognized gain on the sale for regular income tax is for AMT purposes. As a result, Reya has a AMT adjustment of positive negative $ in 2023 b. How would your answers in (a) change if Reya had sold the stock in 2021 rather than 2023? of Reya has a $ AMT adjustment is required in 2021. For regular tax purposes, Reya would recognize $ ordinary/compensation income and a $ short-term capital gain
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
