Several years ago, Mr. B’s employer gave him options to purchase 1,000 shares of the employer’s stock at a price of $24 per share. At that time, the shares were trading at $20 per share. The employer is a publicly-traded company. During April 2020, Mr. B exercises the options. At this time, the shares are trading at $26.50 per share. In July 2021, Mr. B sells the shares for $40 per share.

Required: Determine the tax effect of the transactions that took place during 2020 and 2021 for Mr. B’s Net Income For Tax Purposes (NIFTP) and Taxable Income. In your inputs below, simply enter whole numbers without any signs or words (no $, comma, or brackets). Round your answers to the nearest dollar amount where applicable. 

a. In the year 2020: Effect for his NIFTP................................ 

b. In the year 2020: Effect for his Taxable income................. 

c. In the year 2021: Effect for his NIFTP................................ 

d. In the year 2021: Effect for his Taxable income..................

Answer rating: 100% (QA)

Consider April 2020 1000 shares x 24 per share 24000 Market value is 265 ... View the full answer