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Bell Corporation grants an incentive stock option to Peggy an employee on January 1 2015, when the option price and FMV of the Bell stock is $80 The option entitles Peggy to buy 10 shares of Bell


Bell Corporation grants an incentive stock option to Peggy, an employee, on January 1, 2015, when the option price and FMV of the Bell stock is $80. The option entitles Peggy to buy 10 shares of Bell stock. Peggy exercises the option and acquires the stock on April 1, 2017, when the stock’s FMV is $100. Peggy, while still employed by the Bell Corporation, sells the stock on May 1, 2019, for $120 per share.

a. What are the tax consequences to Peggy and Bell Corporation on the following dates: January 1, 2015; April 1, 2017; and May 1, 2019? (Assume all incentive stock option qualification requirements are met.)

Apr 03 2020 Read more Less More

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