On October 23, 2014, McIntyre Sells 700 Shares of Stock

question 71

Multiple Choice

On October 23, 2014, McIntyre sells 700 shares of stock at $26 per share. McIntyre acquired the stock on June 1, 2013, when he exercised his option to purchase the shares through his company's incentive stock option plan. The exercise price was $12 per share and the fair market value of the stock at the date of exercise was $16 per share. For 2014, McIntyre must report Ordinary Capital Income Gain

• A) $-0- $7,000
• B) $-0- $9,800
• C) $9,800 $-0-
• D) $2,800 $7,000

---

Definitions:

Allowances

Amounts deducted from an employee's gross pay for specific purposes such as taxes, health insurance, and retirement funds.

Overtime Rate

The rate of pay that is higher than the regular hourly rate, paid to employees for hours worked beyond the standard workweek.

Gross Pay

The total amount of salary or wages earned by an employee before any deductions are taken for taxes, social security, etc.

Calendar Year

The one-year period that begins on January 1 and ends on December 31, used for most civil purposes and by many businesses as a fiscal year.