Individual Income Taxes
Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 19, Problem 26CE

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.

  1. a. What amount and type of income, if any, will Gustavo have on the exercise date?
  2. b. What amount and type of income, if any, will Gustavo have on the date of the sale?
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Understanding U.S. Taxes; Author: Bechtel International Center/Stanford University;https://www.youtube.com/watch?v=QFrw0y08Oto;License: Standard Youtube License