Paola exercised an incentive stock option on March 1, 2017. She acquired 2,000 shares of stock at

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Paola exercised an incentive stock option on March 1, 2017. She acquired 2,000 shares of stock at an exercise price of $3 per share when the fair market value of the stock was $15 per share. However, Paola was concerned that the stock was overvalued, so she sold all of the stock acquired with the option on December 21, 2017, for $17 per share. Will Paola incur an AMT adjustment in 2017 as a result of the exercise of the
option or the sale of the shares? Explain.

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South Western Federal Taxation Individual Income Taxes 2018

ISBN: 9781337385893

41st Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young, Nellen

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