Elmer Exercises an Incentive Stock Option (ISO) in March for $6,000

question 81

True/False

Elmer exercises an incentive stock option (ISO) in March for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock in November of the same tax year for $8,000, he reports a $1,600 AMT adjustment for the year.

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Definitions:

Transcription

Transcription is the process that takes place when RNA polymerase reads a coding sequence of DNA and produces a complementary strand of RNA, called messenger RNA (mRNA).

Translation

Translation is the process that takes place when a strand of mRNA is decoded by a ribosome to produce a protein.

Mature RNA Transcript

The final form of RNA after processing, which includes splicing and modifications, ready for translation into a protein.

Primary RNA Transcript

The initial RNA copy made from a DNA template during transcription before any modifications occur.