: Please show detailed calculations and explanations. Answers without showing calculations/explanations, will not receive credit.

Orange Incorporated issued 20,500 nonqualified stock options valued at $41,000 (in total). The options vest over two yearshalf in 2022 (the year of issue) and half in 2023. One thousand options are exercised in 2023 with a bargain element on each option of $7. What is the 2023 booktax difference associated with the stock options?