Yvonne Exercises Incentive Stock Options (ISOs) for 100 Shares of Apple

question 86

Multiple Choice

Yvonne exercises incentive stock options (ISOs) for 100 shares of Apple Corporation stock at the option price of $100 per share on May 21, 2017, when the fair market value is $120 per share. She sells the 100 shares of stock 3 1/2 years later for $140. Determine the recognized gain on the sale and classify it as capital or ordinary.

• A)$2,000 LTCG.
• B)$2,000 ordinary income.
• C)$4,000 LTCG.
• D)$4,000 ordinary income.
• E)None of the above.

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Definitions:

Diplopia

A medical condition also known as double vision, where a single object is perceived as two overlapping images.

Glucose

A simple sugar that is an important energy source in living organisms and a component of many carbohydrates.

Vitamin C

Vitamin C is an essential nutrient and antioxidant that the body needs for the growth and repair of tissues, immune system function, and the absorption of iron from food sources.

Vitamin D

A fat-soluble vitamin that is essential for maintaining the health of bones and teeth, supporting immune system function, and influencing mood and heart health.