Bender Corporation grants a nonqualified stock option to Penny, an employee, on January 1, 2022, that entitled Penny to acquire 1,000 shares of Bender stock at $80 per share. On this date, the stock has a $100 FMV and the option has a readily ascertainable FMV of $20 per share. Penny exercises the option on January 1, 2023 (when the FMV of the stock is $150), and acquires 1,000 shares of the stock for $80 per share. Penny later sells the Bender stock on January 1, 2025, for $200 per share.
a. What are the tax consequences to Penny and Bender Corporation on the following dates: January 1, 2022; January 1, 2023; and January 1, 2025?
b. How would your answer to Part a change if the Bender stock were instead closely-held and the option had no readily ascertainable FMV?