Which of the Following Is a Characteristic of an Incentive

question 20

Multiple Choice

Which of the following is a characteristic of an incentive stock option?

• A)The issuer recognizes compensation expense if the strike price is below the stock's selling price when the option is granted.
• B)The issuer recognizes a compensation deduction when the option is exercised.
• C)The option holder recognizes compensation income when the option is exercised.
• D)The option holder recognizes capital gain when the stock acquired with the option is sold.

---

Definitions:

Real Property

Land and anything permanently attached to it, such as buildings and structures, differentiated from personal property which can be moved.

Personal Property

refers to movable items owned by an individual or corporation, excluding real estate.

Real Property

Refers to land and any permanent structures attached to it, such as buildings or houses.

Tangible Personal Property

Physical items owned by an individual or entity, such as furniture, vehicles, and electronics, excluding real estate.