Question
Mark received 35 ISOs (each option gives him the right to purchase 15 shares of Hendricks Corporation stock for $6 per share) at the time
Mark received 35 ISOs (each option gives him the right to purchase 15 shares of Hendricks Corporation stock for $6 per share) at the time he started working for Hendricks Corporation five years ago when Hendricks stock price was $6 per share. Now that Hendricks share price is $42 per share, he intends to exercise all options and hold all of his shares for more than one year. Assume that more than a year after exercise, Mark sells the stock for $42 a share. (Round your answers to the nearest whole dollar amount. Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable.) |
a. | What are Marks taxes due on the grant date, the exercise date, and the date he sells the shares, assuming his ordinary marginal rate is 30 percent and his long-term capital gains rate is 15 percent? |
b. | What are Hendricks tax consequences on the grant date, the exercise date, and the date Mark sells the shares assuming its marginal tax rate is 25 percent? |
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