In 2005,Collies Exercised an Incentive Stock Option (ISO),acquiring 150 Shares

question 62

Multiple Choice

In 2005,Collies exercised an incentive stock option (ISO) ,acquiring 150 shares of stock at an option price of $75 per share (fair market value at the date of exercise was $130 per share) .In 2014,the rights in the stock become freely transferable (fair market value is still $130 per share) . Which of the following statements is incorrect?

• A)Collis has no AMT adjustment from the ISO in 2011.
• B)Collis has no taxable income from the ISO in 2011.
• C)Collis has an AMT basis of $19,500 in the stock.
• D)Collis has an income tax basis of $11,250 in the stock.
• E)All of these are correct.

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Definitions:

Trapezius Muscle

A large superficial muscle that extends from the occipital bone to the lower thoracic vertebrae and to the scapular spine, involved in moving the shoulder blade and supporting arm movements.

Intercostal Space

An anatomical term referring to the space located between two ribs, through which nerves and blood vessels run.

Midclavicular Line

An imaginary vertical line passing through the midpoint of the clavicle in each half of the human body.

Thrill

A vibration felt on palpation, such as over an area of turbulent blood flow in an artery or a heart valve, indicative of certain types of cardiovascular abnormalities.