On October 1, Year 1, Collin received 100 incentive stock options (ISOs) from his employer. Each option gives him the right to purchase 5 shares of stock for $20 per share with a vesting date of October 1, Year 3. On October 1, Year 3, Collin exercised all 100 options when the price was $24 per share. He held the stock for three years and then sold all of the shares for $30 per share. He is in the 32% tax bracket. What is his tax liability on the exercise date and sale date?

Multiple Choice

• $0 on exercise date; $0 on sale date

• $640 on exercise date; $450 on sale date

• $640 on exercise date; $600 on sale date

• $0 on exercise date; $750 on sale date

• $0 on exercise date; $1,000 on sale date