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Selena received 25 ISOs (each option gives her the right to purchase 5 shares of stock for $12 per share) when the stock price
Selena received 25 ISOs (each option gives her the right to purchase 5 shares of stock for $12 per share) when the stock price was $13 per share. Five years later, when the share price was $23 per share, she exercised all of her options. If Selena holds the shares three years and sells them when the market price is $30, how much gain will Selena recognize on the sale and how much tax will she pay assuming her marginal tax rate on ordinary income is 35 percent and her preferential tax rate is 15%? $2,250 gain; $338 tax $2,125 gain; $319 tax $2,250 gain; $788 tax None of the choices are correct $875 gain; $131 tax
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