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In January 2013, Khors Company Issues Nonqualified Stock Options to Its

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In January 2013, Khors Company issues nonqualified stock options to its CEO, Jenny Svaro. Because the company does not expect Ms. Svaro to leave the company, the options vest at the time they are granted with a total value of $50,000. In December of 2014, the company experiences a surge in its stock price, and Ms. Svaro exercises the options. The total bargain element at the time of exercise is $60,000. For 2014, what is the book-tax difference due to the options exercised?


Definitions:

Gastr/o

A prefix used in medical terminology referring to the stomach.

Ultra-

A prefix meaning beyond, excessively, or to an extreme degree, often used in scientific contexts.

Ante-

A prefix meaning before, used in various terms to indicate precedence in time or order.

Suffix

An addition to the end of a term that changes the grammatical function of the term.

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