On January 1, 20x0, Ralph was awarded 15,000 ISOs at an exercise price of $3 per share when the fair market value of the stock was equal to $3. On April 17, 20x1, Ralph exercised all of his ISOs when the fair market value of the stock was $5 per share. At the date of exercise, what are the tax consequences to Ralph? $0 W2 income; $30,000 AMT adjustment $0 W2 income; $75,000 AMT adjustment $30,000 ordinary income; $30,000 AMT adjustment $75,000 ordinary income;
On January 1, 20x0, Ralph was awarded 15,000 ISOs at an exercise price of $3 per share when the fair market value of the stock was equal to $3. On April 17, 20x1, Ralph exercised all of his ISOs when the fair market value of the stock was $5 per share. At the date of exercise, what are the tax consequences to Ralph? $0 W2 income; $30,000 AMT adjustment $0 W2 income; $75,000 AMT adjustment $30,000 ordinary income; $30,000 AMT adjustment $75,000 ordinary income;
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 20x0, Ralph was awarded 15,000 ISOs at an exercise price of $3 per share when the fair market value of the stock was equal to $3. On April 17, 20x1, Ralph exercised all of his ISOs when the fair market value of the stock was $5 per share. At the date of exercise, what are the tax consequences to Ralph?
$0 W2 income; $30,000 AMT adjustment
$0 W2 income; $75,000 AMT adjustment
$30,000 ordinary income; $30,000 AMT adjustment
$75,000 ordinary income; $0 AMT adjustment
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