Question
In 2013, BT granted a nonqualified stock option to Ms. Pearl to buy 500 shares of BT stock at $20 per share for five years.
In 2013, BT granted a nonqualified stock option to Ms. Pearl to buy 500 shares of BT stock at $20 per share for five years. At date of grant, BT stock was trading on Nasdaq for $18.62 per share. In 2018, Ms. Pearl exercised the option when BTs stock was trading at $31.40 per share.
- How much income did Ms. Pearl recognize in 2013 and 2018 because of the stock option?
- Compute Ms. Pearls basis in the 500 shares.
- What are the tax consequences of the stock option to BT in 2013 and 2018?
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Internal Auditing Assurance And Consulting Services
Authors: Kurt F. Reding, Paul J. Sobel, Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Mark Salamasick, Contributing Writer, Cris Ridd, Richard Tuschman
1st Edition
0894136100, 978-0894136108
