Tax Consequences of a Nonqualified Stock Option Plan. In 2018, Z Corporation grants a nonqualified stock option to employee M. The option allows M to purchase 100 shares of Z Corporation stock for $20 per share at any time during the next four years. Because the current market value of Z stock is $22 per share, the option has a readily ascertainable value of $200 ($2 per share bargain element x 100 shares) at date of grant. M exercises the option in 2018 when the market value of the Z stock has increased to $28 per share. a. How much income does M recognize in 2018 because of the receipt of the option? b. How much income does M recognize in 2019 upon exercise of the option? c. What amount of deduction is available to Corporation Z because of the option granted to M? In what year is the deduction claimed