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On June 3, 2021, Harriet exercised an incentive stock option (ISO) granted to her by her employer. Her option enabled her to purchase 100 shares
On June 3, 2021, Harriet exercised an incentive stock option (ISO) granted to her by her employer. Her option enabled her to purchase 100 shares of stock for $5 per share, for a total cost of $500. When she exercised her option, the stock was trading at $9 per share. She sold the stock in February of 2022 for $15 per share, for a total amount received of $1,500. What amount(s) does Harriet report on her 2022 tax return as a result of this transaction? $1,000 compensation. $600 compensation; $400 short-term capital gain. $400 compensation; $600 short-term capital gain. $1,000 short-term capital gain. Mark for follow up
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