What Statement Is False with Respect to an Incentive Stock

question 7

Multiple Choice

What statement is false with respect to an incentive stock option (ISO) ?

• A)To qualify as an ISO, the option price must equal or exceed the fair market value of the stock at the time the option is granted.
• B)The spread is not subject to the alternative minimum tax.
• C)If the employee meets the holding period requirement, the employer does not obtain a business deduction.
• D)The spread is the excess of the FMV of the share at the date of exercise over the option price.
• E)None of the above are false.

---

Definitions:

Budget Deficit

Occurs when a government spends more money than it receives in revenue over a specific period of time.

Public Savings

The difference between government revenue and government spending, representing a net saving or borrowing position.

Borrowing

The act of receiving something with the intention to return it or its equivalent, often referring to receiving funds from a lender under the condition of repaying it with interest.

Investing

Allocating resources, usually money, with the expectation of generating an income or profit.