Question
Yost received 300 NQOs (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $28 per share) at the time
Yost received 300 NQOs (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $28 per share) at the time he started working for Cutter Corporation three years ago. Cutters stock price was $28 per share. Yost exercised all of his options when the share price was $56 per share. Two years after acquiring the shares, he sold them at $86 per share. (Input all amounts as positive values. Leave no answer blank. Enter zero if applicable.)
a. What are Yosts amount of income/gain recognized and amount of taxes payable on the grant date, exercise date, and sale date, assuming his ordinary marginal rate is 35 percent and his long-term capital gains rate is 15 percent?
Income Amount | Taxes due | |
Grant date | ||
Exercise Date | ||
Sale Date |
b. What are Cutter Corporations tax consequences (amount of deduction and tax savings from deduction) on the grant date, the exercise date, and the date Yost sells the shares?
Income Amount | Taxes due | |
Grant date | ||
Exercise Date | ||
Sale Date |
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