1. On January 1^st, three years ago, Randy 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^th this year, Randy 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 Randy?

(a) $0 W-2 income, $30,000 AMT adjustment.

(b) $0 W-2 income, $75,000 AMT adjustment.

(c) $30,000 ordinary income, $30,000 AMT adjustment.

(d) $75,000 ordinary income, $0 AMT adjustment.