On February 19,2014,Woodbridge Corporation Granted Harvey an Option to Acquire

question 53

Multiple Choice

On February 19,2014,Woodbridge Corporation granted Harvey an option to acquire 200 shares of the company's stock for $10 per share.The fair market price of the stock on the date of grant was $16.The stock requires that Harvey remain with the company for one year after the date of exercise.The option did not have a readily ascertainable fair market value.Harvey exercises the option on September 23,2015,when the fair market value of the stock is $19.He makes a Section 83(b) election at the exercise date.On September 23,2016,the fair market value of the stock is $25 per share.How much must he report as income in 2016?

• A)$-0-
• B)$1,200
• C)$1,800
• D)$2,000
• E)$3,000

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Definitions:

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Acts or transactions conducted by a corporation that fall outside the scope of powers and purposes defined by its charter or laws; such acts may be invalid or unauthorized.

Clayton Act

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In antitrust law, a situation that occurs when individuals serve as directors for two corporations that are competitors.