Cammie received 100 NQOs (each option provides a right to purchase 10 shares of MNL stock for $10 per share) at the time she started working for MNL Corporation (5/1/Y1) four years ago when MNL’s stock price was $8 per share. Now (8/15/Y5) that MNL’s stock price is $40 per share, she intends to exercise all of her options. After acquiring the 1,000 MNL shares with her options, she held the shares for over one year (10/1/Y6) and sold them at $60 per share. 

a. What are Cammie’s tax consequences on the grant date (5/1/Y1), the exercise date (8/15/Y5), and the sale date (10/1/Y6) assuming her ordinary marginal rate is 32 percent and her capital gains rate is 15 percent?

b. What are MNL Corporation’s tax consequences on grant date (5/1/Y1), exercise date (8/15/Y5), and sale date (10/1/Y6) assuming its marginal tax rate is 21 percent? 

c. Complete Cammie’s Form 8949 and Schedule D for the year of sale. Also assume that the sale transaction of the MNL Corporation stock was not reported to Cammie on a Form 1099-B.