In 2012, Lance was granted 2,000 stock options by his employer, Lynn Corporation. Each option allowed Lance to purchase one share of Lynn Corporation stock for $18 per share. On the date the options were granted to Lance in 2012, The Lynn Corporation stock was selling for $16 per share. In 2015, when the Lynn Corporation stock was selling for $39 per share, Lance exercised his options and purchased 2,000 shares of Lynn Corporation. In 2017, Lance sold his Lynn Corporation stock for $36 per share.

a) What are the federal income tax consequences to Lance and Lynn Corporation in 2012, 2015 and 2017 if the Lynn Corporation options granted to Lance were qualified incentive stock options (ISOs)? You may ignore alternative minimum tax (AMT) for this question. Please provide the calculations.

b) What are the federal income tax consequences to Lance and Lynn Corporation in 2012, 2015 and 2017 if the Lynn Corporation options granted to Lance were nonqualified stock options (NQSOs) You may ignore alternative minimum tax (AMT) for this question. Please provide the calculations.