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

question 20

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 holds the stock for only seven months and sells the shares for $140 per share. Determine the recognized gain on the sale and classify it as capital or ordinary.

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

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Definitions:

Small D Deaf

refers to the audiological condition of not hearing, without emphasis on the cultural or linguistic affiliations.

Capital D Deaf

A term used to refer to individuals who identify with the Deaf community, emphasizing Deaf culture and the use of sign language as primary means of communication.

Sign Language Interpreters

Professionals trained to translate spoken language into sign language and vice versa, facilitating communication between deaf or hard of hearing individuals and those who are hearing.

Politically Active

Engagement in activities intended to influence government policy or leadership, such as voting, campaigning, or advocating.