CSR 48600
ITEM SET 5: I505 AND NQSOS Nick Icamina is the CEO of Chaos Baseball Equipment, Inc. (Chaos). It is a rapidly growing publicly traded company. He was...
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2. What are the tax implications for the A options during Year 5?


3. What are the tax implications for the B options during Year 5?

4. What are the tax implications for the C options during Year 5? 


5. What are the tax implications for the D options during Year 5?

 6.Over the last five years, Nick's salary has increased from $450,000 to $900,000 and his annual bonus has increased to $400,000 as the market value of the company has increased. What are some of the tax implications?


How to calculate 1-6?

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ITEM SET 5: I505 AND NQSOS Nick Icamina is the CEO of Chaos Baseball Equipment, Inc. (Chaos). It is a rapidly growing publicly traded
company. He was awarded the following stock options from his company: Option Grant Grant Date Exercise Price February 1, Year 1 $20
-:- W1, vearz $25 C August 1, Year 3 $30
D May 1, Year 4 $30 During Year 5, Nick had the following transactions regarding the above stock options:

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Option Grant
Date
Action
# Shares
Market Price on
Action Date
A
February 1
Exercised
100
$42
A
February 1
Sold
100
$42
B
February 14
Exercised
100
$45
February 14
Exercised
100
$45
D
May 1
Exercised
100
$50
D
June 1
Sold
100
$60
1. How much income would Nick have when his ISOs are granted?
Answer:

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