Sanjay a good employee. His employer, Astra Company, a CCPC, rewards Sanjay with stock options for 100 shares on June 22nd, 2020. The options have an exercise price of $21 and the price was $23 on the date they were granted. The company does well, and Sanjay exercises the stock options on November 30, 2021, when the stock price is $30. Sanjay sells the shares two years later for $41 per share. Calculate and explain the tax consequences when:

a) the options are granted (June 22, 2020)

b) the options are exercised (November 30, 2021)

c) the shares are sold (November 30, 2023).

Answer rating: 100% (QA)

a When the options are granted June 22 2020 At the time of grant there is generally no immediate tax consequence for Sanjay The grant of stock options ... View the full answer