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

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Point B

A specific position or location on a graph or diagram, used often in economic models to denote a particular outcome or situation.

Point A

A specific position or location often referenced in economic models or graphs to illustrate a particular scenario or outcome.

Opportunity Cost

The budgetary repercussion of passing on the subsequent top pick when decisions are taken.