Which of the Following Describes the Correct Treatment of the Exercise

question 44

Multiple Choice

Which of the following describes the correct treatment of the exercise of nonqualified stock options (NQOs) that were granted when ASC 718 applies?

• A) Financial-no expense; tax-no deduction.
• B) Financial-no expense; tax-deduct bargain element at exercise.
• C) Financial-expense value over vesting period; tax-no deduction.
• D) Financial-expense value over vesting period; tax-deduct bargain element at exercise.

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Definitions:

Plantation Work

Labor performed on large agricultural estates, historically associated with slavery and the cultivation of cash crops such as tobacco, cotton, and sugar.

Fugitive Slave Act

The Fugitive Slave Act was a law passed by the United States Congress in 1850 to provide for the return of slaves who escaped from one state into another state or territory.

American Colonization Society

An organization established in the early 19th century aimed at resettling free African-Americans to Africa; Liberia was a significant colony established by this society.

Liberia

A West African country founded in the 19th century by freed slaves from the United States.