CHAPTER 19--DEFERRED COMPEN

On february 3 2008 samuel is granted nonqualified

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84. On February 3, 2008, Samuel is granted nonqualified stock options (NQSOs) for 100 shares of common stock at $10 per share. On the grant date, the stock is selling for $15 per share and the option is selling for $5. He exercises these options on January 3, 2009, when the stock is selling for $18 per share. He sells one-half of the shares on April 15, 2010, and the other half on September 17, 2010. The sale price on both dates is $21 per share. The stock and the stock options are listed on an organized stock exchange. What amount of income, if any, is recognized by Samuel in 2008? A. $0. B. $250 ordinary income. C. $500 capital gain. D. $500 ordinary income. E. None of the above. 11
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85. On February 3, 2008, Samuel is granted nonqualified stock options (NQSOs) for 100 shares of common stock at $10 per share. On the grant date, the stock is selling for $15 per share and the option is selling for $5. He exercises these options on January 3, 2009, when the stock is selling for $18 per share. He sells one-half of the shares on April 15, 2010, and the other half on September 17, 2010. The sale price on both dates is $21 per share. The stock and the stock options are listed on an organized stock exchange. What amount of income, if any, is recognized by Samuel in 2010? 86. On February 3, 2008, Samuel is granted nonqualified stock options (NQSOs) for 100 shares of common stock at $10 per share. On the grant date, the stock is selling for $15 per share and the option is selling for $5. He exercises these options on January 3, 2009, when the stock is selling for $18 per share. He sells one-half of the shares on April 15, 2010, and the other half on September 17, 2010. The sale price on both dates is $21 per share. The stock and the stock options are listed on an organized stock exchange. What amount of income, if any, is recognized by Samuel in 2009? 87. The following is not considered to be an advantage of a § 401(k) plan over an IRA (excluding SIMPLE IRAs). 88. Which of the following is considered an advantage of an IRA over a § 401(k) plan? A. Employer involvement is minimal. B. Favorable ten-year averaging may be available. C. Higher contribution limitation. D. Distributions taxed at capital gain rates. E. None of the above.
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  • Spring '12
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  • a. b. c., b. c. d., C. D. E.

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