In May 2013,Swallow,Inc

question 71

Essay

In May 2013,Swallow,Inc. ,issues options to Karrie,a corporate officer,to purchase 100 shares of Swallow stock under an ISO plan.At the date the stock options are issued,the fair market value of the stock is $1,000 per share and the option price is $1,200 per share.The stock becomes freely transferable in 2014.Karrie exercises the options in November 2013 when the stock is selling for $1,500 per share.She sells the stock in December 2015 for $1,800 per share.
​
a.Determine the amount of the AMT adjustment for 2013.
b.Determine the amount of the AMT adjustment for 2014.
c.Determine Karrie's recognized gain for regular income tax purposes and for AMT purposes in 2015 on the sale of the stock.
d.Determine the amount of the AMT adjustment for 2015.

---

Definitions:

Book

A set of written, printed, or blank pages fastened along one side and encased between protective covers.

Finalizers

Special methods in Java that the garbage collector calls on an object when no more references to the object exist, to perform cleanup operations before the object is destroyed.

Illegal Statements

Code elements in programming that violate the syntax rules of the programming language and prevent the code from compiling.

Static Int

A static integer variable, meaning it belongs to the class rather than instances of the class and has the same value across all instances.