In 2015, Liza exercised an incentive stock option that had been granted to her in 2013 by her employer, White Corporation. Liza acquired 100 shares of White stock for the option price of $190 per share. The fair market value of the stock at the date of exercise was $250 per share. Liza sells the stock for $340 per share in 2017.
a. What is Liza’s AMT adjustment in 2015? What is her recognized gain on the sale for regular income tax and for AMT purposes?
b. How would your answers in (a) change if Liza had sold the stock in 2015 rather than 2017?
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