In 2008, Mr Delgado Exercised an Option to Purchase 1,000

question 50

Multiple Choice

In 2008, Mr Delgado exercised an option to purchase 1,000 shares of his employer's stock for $29 per share when the market price was $65 per share. This year, Mr Delgado sold the stock for $80 per share. Which of the following statements is false?

• A) If the option was an ISO, Mr. Delgado recognized a $51,000 gain on sale.
• B) If the option was nonqualified, Mr. Delgado recognized a $15,000 gain on sale.
• C) If the option was an ISO, Mr. Delgado has a $36,000 AMT preference item this year.
• D) None of the above is false.

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Definitions:

Voting Rights

The legal rights granted to individuals enabling them to vote in political elections.

Northern Vision

A phrase that reflects the perspectives, objectives, or aspirations prevalent in the northern part of a country, which can differ significantly from those in the south due to cultural, economic, or political differences.

Sharecropping

An agricultural system where tenants agree to work a landowner's land in return for a share of the crops produced on their portion of land.

Southern Economy

Historically, the economy of the southern United States, which was heavily reliant on agriculture, particularly the cultivation of cotton and other cash crops, and was significantly impacted by slavery until the Civil War.