Marvin,the Vice President of Lavender,Inc

question 67

Multiple Choice

Marvin,the vice president of Lavender,Inc. ,exercises stock options for 100 shares of stock in March 2014.The stock options are incentive stock options (ISOs) .Their exercise price is $20 and the fair market value on the date of exercise is $28.The options were granted in March 2010 and all restrictions on the free transferability had lapsed by the exercise date.

• A)If Marvin sells the stock in December 2015 for $3,000,his AMT adjustment in 2015 is a positive adjustment of $800.
• B)If Marvin sells the stock in December 2016 for $3,000,his AMT adjustment in 2016 is $0.
• C)If Marvin sells the stock in December 2015 for $3,000,his AMT adjustment in 2015 is a negative adjustment of $800.
• D)If Marvin sells the stock in December 2016 for $3,000,his AMT adjustment in 2016 is a negative adjustment of $1,000.
• E)None of the above.

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Definitions:

Embryo

An early stage of development in multicellular organisms, in humans, it refers to the stage after fertilization and before becoming a fetus.

Fetus

A developing mammal or human from the end of the embryonic stage until birth, during which significant growth and organ development occur.

Critical Period

A specific time during development when the brain is particularly receptive to acquiring certain types of information or skills.

Development

The process of growth and change that occurs in biological organisms, including physical, cognitive, and emotional development.