Ellison exercised a nonstatutory stock option on May 31, 2023. He paid $16,000 for 100 shares of his company's stock. Thefair market value of the shares on that date was $20,000. Although Ellison continues to hold these shares, he included the$4,000 difference between the fair market value and the purchase price as compensation income when he filed his 2023return. What is Ellison's basis in the stock?$0$4,000$16,000O $20,000

Ellison's basis in the stock after exercising the nonstatutory stock option is calculated as…

Answered: Ellison exercised a nonstatutory stock…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 63P

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On April 5, 2017, 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, 2018, when the stock was selling for 60 per share. He sold the shares on December 1, 2019, 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?
In March 2019, Serengeti exercised an ISO that had been granted by his employer, Thunder Corporation, in December 2016. Serengeti acquired 5,000 shares of Thunder stock for the exercise price of 65 per share. The fair market value of the stock at the date of exercise was 90 per share. What is Serengetis 2016 AMT adjustment related to the ISO? What is the 2019 adjustment?
On May 9, 2019, Glenna purchases 500 shares of Ignaz Company stock for 7,500. On June 30, 2019, she writes a call option on the stock, giving the grantee the right to buy the stock for 9,000 during the following 12-month period. Glenna receives a call premium of 750 for writing the call. The call is exercised by the grantee on December 15, 2019. a. What is the amount and character of Glennas gain or loss? b. Assume that the original option expired unexercised. What is the amount and character of Glennas gain or loss?
Dennis sells short 100 shares of ARC stock at 20 per share on January 15, 2019. He buys 200 shares of ARC stock on April 1, 2019, at 25 per share. On May 2, 2019, he closes the short sale by delivering 100 of the shares purchased on April 1. a. What are the amount and nature of Denniss loss upon closing the short sale? b. When does the holding period for the remaining 100 shares begin? c. If Dennis sells (at 27 per share) the remaining 100 shares on January 20, 2020, what will be the nature of his gain or loss?
Xavier exercised a nonstatutory stock option on April 29, 2022. He purchased 1,000 shares of his company's stock for $10,000. The fair market value of the stock at the time of purchase was $15,500. He included the $5,500 difference between the fair market value and the purchase price as compensation income when he filed his 2022 return. What is Xavier's basis in the underlying stock? $0 $5,500 $10,000 $15,500
Arnold exercised an incentive stock option in 2019, acquiring 1,500 shares of stock at an option price of $80 per share. The FMV of the stock at the date of exercise was $110 per share. In 2021, the rights became freely transferable and were not subject to a substantial risk of forfeiture. Arnold sells the shares in 2022 for $165 per share. Required: How do these transactions affect his AMTI in 2019, 2021, and 2022? Note: Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.
On December 28, 2020, Kramer sells 150 shares of Lavender, Inc. stock for $77,000. On January 10, 2021, he purchases 100 shares of the same stock for $82,000. Assuming that Kramer's adjusted basis for the stock sold is $89,000, what is his recognized gain or loss? Kramer's recognized loss is $________. (Side note: 120000 & -12000 is wrong) What is his basis for the new shares? $90,000.
Arnold exercised an incentive stock option in 2017, acquiring 1,300 shares of stock at an option price of $185 per share. The FMV of the stock at the date of exercise was $219 per share. In 2019, the rights became freely transferable and were not subject to a substantial risk of forfeiture. Arnold sells the shares in 2020 for $278 per share. Required: How do these transactions affect his AMTI in 2017, 2019, and 2020? (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)
John bought $1,000 shares of intel stock on Oct 18,2016, for $30 per share plus $750 commission he paid to his broker. On Dec 12, 2020, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction. What’s john’s adjusted basis in the 1,000 shares of Intel Stock? What amount does John realize when he sells the 1,000 shares? What is the gain/loss for John on the sale of his Intel stock? What is the character of the gain/loss?
rnold exercised an incentive stock option in 2017, acquiring 1,200 shares of stock at an option price of $190 per share. The FMV of the stock at the date of exercise was $223 per share. In 2019, the rights became freely transferable and were not subject to a substantial risk of forfeiture. Arnold sells the shares in 2020 for $281 per share. Required: How do these transactions affect his AMTI in 2017, 2019, and 2020?
John bought 1,000 shares of Intel stock on October 18, 2018 for $30 per share plus a $750 commission he paid to his broker. On December 12, 2022, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction. What is John’s adjusted basis in the 1,000 shares of Intel stock? What amount does John realize when he sells the 1,000 shares? What is the gain/loss for John on the sale of his Intel stock? What is the character of the gain/loss?
bhavesh

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