(solution) On 1 of January 2013 ABC company anounced Stock options for the

(solution) On 1 of January 2013 ABC company anounced Stock options for the

On 1 of January 2013 ABC company anounced Stock options for the CFO at the price of $25 a share – 1000 shares. The excersise time is from January 2013 till January 2015. Answer the following questions in details;

1. These are NSO and he buys them on March 2014 when the marker price is $30 a share and sells them in 2016 at $40 a share. What are the tax consiquences for CFO and for the ABC Co. 

2. These are ISO  and he buys them on March 2014 when the marker price is $30 a share and sells them in 2016 at $40 a share. What are the tax consiquences for CFO and for the ABC Co.

3 These are ISO  and he buys them on March 2014 when the marker price is $30 a share and sells them in June 2014 at $40 a share. What are the tax consiquences for CFO and for the ABC Co.

Thank you!!

SOLUTION:ISOs and NSOs
NSOs are defined as non-statutory stock options, these can be awarded to non-employees such as
consultants or members of the board of directors as well as to employees.
ISOs…