On April 5, 2019, Gustavo was granted an NQSO for 200 shares of common stock at $50

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On April 5, 2019, Gustavo was granted an NQSO for 200 shares of common stock at $50 per share. On the date of the grant, there was no readily ascertainable fair market value for the option. Gustavo exercised the options on March 31, 2020, when the stock was selling for $60 per share. He sold the shares on December 1, 2021, for $75 per share.

a. What amount and type of income, if any, will Gustavo have on the exercise date?

b. What amount and type of income, if any, will Gustavo have on the date of the sale?

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South-Western Federal Taxation 2022 Individual Income Taxes

ISBN: 9780357519073

45th Edition

Authors: James C. Young, Annette Nellen, William A. Raabe, Mark Persellin, William H. Hoffman

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Question Posted: Jul 26, 2022 01:02 AM

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On April 5, 2019, Gustavo was granted an NQSO for 200 shares of common stock at $50

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Calculations and thorough explanation a Gustavo will have 10000 of ordinary in...View the full answer

South-Western Federal Taxation 2022 Individual Income Taxes

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