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:

Eighth Amendment

Part of the U.S. Constitution's Bill of Rights that prohibits the federal government from imposing excessive bail, excessive fines, or cruel and unusual punishment.

Recidivism

The tendency of a convicted criminal to reoffend, typically measured by the occurrence of subsequent criminal behavior.

Nulla Poena Sine Lege

A legal principle meaning "no penalty without a law," indicating one cannot be punished for doing something that is not prohibited by law.

Ex Post Facto Criminal Laws

Laws that retroactively change the legal status or consequences of actions that were committed before the enactment of the law.