Andrea was granted 50 ISOs. Each ISO allows her to purchase 100 shares of stock at $5 per share. She exercised all the options after the three year vesting date when the market value of the stock was $25 per share. She needed the money so she sold all shares the same day at a market price of $25 per share. What does she recognize and what does her employer get? She has $100,000 LTCG; the employer gets $25,000 She has $100,000 STCG; the employer gets $25,000 She has $100,000 Ordinary Income; the employer gets $25,000 cash and a $100,000 tax deduction She has $100,000 Ordinary Income; the employer gets $25,000

Andrea was granted 50 ISOs. Each ISO allows her to purchase 100 shares of stock at $5 per share. She exercised all the options after the three year vesting date when the market value of the stock was $25 per share. She needed the money so she sold all shares the same day at a market price of $25 per share. What does she recognize and what does her employer get? She has $100,000 LTCG; the employer gets $25,000 She has $100,000 STCG; the employer gets $25,000 She has $100,000 Ordinary Income; the employer gets $25,000 cash and a $100,000 tax deduction She has $100,000 Ordinary Income; the employer gets $25,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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