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    Incentive Stock Option Consequences

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    Antonio received 40 ISOs at the time he started working for Zorro Corporation six years ago (each option gives him the right to purchase 20 shares of Zorro stock for $3 per share). Zorro's share price was $3 per share at the time. Now that Zorro's share price is $50 per share, he intends to exercise all of his options and immediately sell all the shares he receives from the options exercise. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

    Required:

    (a) What are Antonio's tax consequences on the grant date, the exercise date, and the date the shares are sold assuming his ordinary marginal rate is 30 percent and his long-term capital gains rate is 15 percent?

    Tax Paid
    Grant date $
    Exercise date & sale date $

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    https://brainmass.com/business/motivation-in-organizations/incentive-stock-option-consequences-341958

    Solution Preview

    Required:

    (a) What are Antonio's tax consequences on the grant date, the exercise date, and the date the shares are sold assuming his ordinary marginal rate is 30 percent and his long-term capital gains rate is 15 percent?

    Tax Paid 5640
    Grant date $ ...

    Solution Summary

    This solution details the tax consequences of an Incentive Stock Option from the perspective of the taxpayer option holder.

    $2.19

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