Which of the Following Is True Regarding Stock Options

question 6

Multiple Choice

Which of the following is true regarding stock options?

• A)A loss is realized when stock options lapse.
• B)There is typically no tax effect on the grant date.
• C)Income recognized on the exercise date is greater for incentive stock options than nonqualified options.
• D)The bargain element on a nonqualified option is taxed to employees at capital gain rates.

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Definitions:

Cohabit

The state or condition of living together in the same home without being married, typically referring to partners in a romantic or sexual relationship.

Household Chores

Routine tasks and maintenance performed in the home, such as cleaning, cooking, and gardening.

Companionship

The feeling of fellowship or friendship, often providing comfort and support to someone.

Nursing Homes

Residential facilities providing long-term care for the elderly or disabled, especially those requiring medical care.