Bell Corporation grants an incentive stock option to Peggy, an employee, on January 1, 2019, when the option price and FMV of the Bell stock is $80.The option entitles Peggy to buy 10 shares of Bell stock. Peggy exercises the option and acquires the stock on April 1, 2021, when the stocks FMV is $100. Peggy, while still employed by the Bell Corporation, sells the stock on May 1, 2023 for $120 per share.

What are the tax consequences to Peggy and Bell Corporation on the fallowing dates:

January 1, 2019; April 1, 2021; and May 1, 2023? (Assume all incentive stock option qualification requirements are met.

b. How would your answer to Part a change if Peggy instead sold the bell stock for $130 per share on May 1, 2021?