Andrea was granted 50 ISOs. Each ISO allows her to purchase 100 shares of stock at $5 per share. She exercised all the options after the three year vesting date when the market value of the stock was $25 per share. She needed the money so she sold all shares the same day at a market price of $25 per share. What does she recognize and what does her employer get?

		She has $100,000 LTCG; the employer gets $25,000
		She has $100,000 STCG; the employer gets $25,000
		She has $100,000 Ordinary Income; the employer gets $25,000 cash and a $100,000 tax deduction
		She has $100,000 Ordinary Income; the employer gets $25,000