Question 1

If a NQSO does not have a readily ascertainable value,an employee recognizes income on the grant date.

Accepted Answer

A) True 
 B)False

Question 2

Which would not be considered an advantage of a nonqualified stock option plan over an incentive stock option (ISO)plan?

Accepted Answer

A)  Granted at any price. 
B)  May have any duration. 
C)  Spread subject to alternative minimum tax. 
D)  Governed by § 83. 
E)  All are considered advantages. 
A)  Granted at any price. 
B)  May have any duration. 
C)  Spread subject to alternative minimum tax. 
D)  Governed by § 83. 
E)  All are considered advantages.

Question 3

Saysha is an officer of a local bank that merges with a national bank,resulting in a change of ownership.She loses her job as a result of the merger,but she receives a cash settlement of $390,000 from her employer under her golden parachute.Her average annual compensation for the past five tax years is $110,000.Calculate any nondeductible excise tax Saysha must pay,if any.

Accepted Answer

A)  $0. 
B)  $56,000. 
C)  $110,000. 
D)  $280,000. 
E)  Some other amount. 
A)  $0. 
B)  $56,000. 
C)  $110,000. 
D)  $280,000. 
E)  Some other amount.

Question 4

On January 1,2009,Gail (an executive)receives a warrant to purchase one share of stock at $70 and on the same date the fair market value of the stock is $100.The warrant has no restrictions and has a readily ascertainable fair market value on a stock exchange of $30.She exercises the warrant on May 15,2009,and sells the stock for $200 on December 20,2012.

Accepted Answer

The answer of On January 1,2009,Gail (an executive)receives a warrant...

If a NQSO does not have a readily ascertainable value,an employee recognizes income on the grant date.

Which would not be considered an advantage of a nonqualified stock option plan over an incentive stock option (ISO)plan?

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, cost Recovery, amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Corporations and Partnerships

Filters

Exam 19: Deferred Compensation

If a NQSO does not have a readily ascertainable value,an employee recognizes income on the grant date.

Which would not be considered an advantage of a nonqualified stock option plan over an incentive stock option (ISO)plan?

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, cost Recovery, amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Corporations and Partnerships

Filters