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

question 69

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 21,2014,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 these.

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Definitions:

Nephron

The basic structural and functional unit of the kidney responsible for filtering and purifying blood to produce urine.

Distal Convoluted Tubule

The segment of the kidney's nephron that functions in the reabsorption of sodium, water, and secretion of potassium and acids, situated after the ascending limb of the loop of Henle.

Collecting Duct

A series of tubes in the kidney that receive urine from the nephrons and transport it into the renal pelvis.

Renal Pelvis

The central part of the kidney where urine collects before moving to the ureter and then to the bladder.