Antonio received 40 ISOs (each option gives him the right to purchase 20 shares of Zorro stock for $3 per share) at the time he started working for Zorro Corporation six years ago. Zorro's stock price was $3 per share at the time. Now that Zorro's stock price is $50 per share, Antonio Intends to exercise all of his options and Immediately sell all the shares he receives from the options exercise. Note: Enter all amounts as positive values. Leave no answers blank. Enter zero If applicable. Required: a. What are Antonio's taxes due on the grant date, the exercise date, and the date the shares are sold, assuming his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? b. What are Zorro's tax consequences on the grant date, the exercise date, and the date Antonio sells the shares? c. What are the cash flow effects of these transactions to Antonio, assuming his ordinary marginal rate is 24 percent and his long-term capital gains rate is 15 percent? d. What are the cash flow effects to Zorro resulting from Antonio's option exercise?

Antonio received 40 ISOs (each option gives him the right to purchase 20 shares of Zorro stock for $3 per share) at the time he started working for Zorro Corporation six years ago. Zorro's stock price was $3 per share at the time. Now that Zorro's stock price is $50 per share, Antonio Intends to exercise all of his options and Immediately sell all the shares he receives from the options exercise. Note: Enter all amounts as positive values. Leave no answers blank. Enter zero If applicable. Required: a. What are Antonio's taxes due on the grant date, the exercise date, and the date the shares are sold, assuming his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? b. What are Zorro's tax consequences on the grant date, the exercise date, and the date Antonio sells the shares? c. What are the cash flow effects of these transactions to Antonio, assuming his ordinary marginal rate is 24 percent and his long-term capital gains rate is 15 percent? d. What are the cash flow effects to Zorro resulting from Antonio's option exercise?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 27CE

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Antonio received 40 ISOs (each option gives him the right to purchase 20 shares of Zorro stock for $3 per share) at the time he started working for Zorro Corporation six years ago. Zorro's stock price was $3 per share at the time. Now that Zorro's stock price is $50 per share, Antonio intends to exercise all of his options and immediately sell all the shares he receives from the options exercise. Note: Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable. Required: a. What are Antonio's taxes due on the grant date, the exercise date, and the date the shares are sold, assuming his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? b. What are Zorro's tax consequences on the grant date, the exercise date, and the date Antonio sells the shares? c. What are the cash flow effects of these transactions to Antonio, assuming his ordinary marginal rate is 24 percent and his long-term capital gains rate is 15 percent? d.…
Antonio received 40 ISOs (each option gives him the right to purchase 20 shares of Zorro stock for $3 per share) at the time he started working for Zorro Corporation six years ago. Zorro’s stock price was $3 per share at the time. Now that Zorro’s stock price is $50 per share, Antonio intends to exercise all of his options and immediately sell all the shares he receives from the options exercise. (Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable.) What are Zorro’s tax consequences on the grant date, the exercise date, and the date Antonio sells the shares?
Antonio received 40 ISOs (each option gives him the right to purchase 20 shares of Zorro stock for $3 per share) at the time he started working for Zorro Corporation six years ago. Zorro’s stock price was $3 per share at the time. Now that Zorro’s stock price is $50 per share, Antonio intends to exercise all of his options and immediately sell all the shares he receives from the options exercise. (Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable.) d. What are the cash flow effects to Zorro resulting from Antonio’s option exercise?
Haven received 200 NQOs (each option gives him the right to purchase 20 shares of Barlow Corporation stock for $7 per share) at the time he started working for Barlow Corporation three years ago when its stock price was $7 per share. Now that Barlow's share price is $50 per share, he intends to exercise all of his options. After acquiring the 4,000 Barlow shares with his stock options, he intends to hold the shares for more than one year and then sell the shares when the price reaches $75 per share. What are the cash flow effects for Barlow Corporation resulting from Haven's option exercise? How would it change if Barlow's marginal rate were 0 percent?
Haven received 200 NQOS (each option gives him the right to purchase 20 shares of Barlow Corporation stock for $7 per share) at the time he started working for Barlow Corporation three years ago when its stock price was $7 per share. Now that Barlow's share price is $50 per share, he intends to exercise all of his options. After acquiring the 4,000 Barlow shares with his stock options, he intends to hold the shares for more than one year and then sell the shares when the price reaches $75 per share. (Leave no answer blank. Enter zero if applicable. Input all amounts as positive values.) a. What are Haven's taxes due on the grant date, exercise date, and sale date, assuming his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? Date Amount Tax due on grant date $ Tax due in year of exercise Tax due in year of sale
Yost received 300 NQOS (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $25 per share). At the time he started working for Cutter Corporation three years ago, Cutter's stock price was $25 per share. Yost exercised all of his options when the share price was $50 per share. Two years after acquiring the shares, he sold them at $77 per share. Note: Input all amounts as positive values. Leave no answer blank. Enter zero if applicable. Problem 12-28 Part d (Algo) d. Assume that Yost's options were exercisable at $30 and expired after five years. If the stock only reached $28 during its high point during the five-year period, what are Yost's tax consequences on the grant date, the exercise date, and the date the shares are sold, assuming his ordinary marginal rate is 35 percent and his long-term capital gains rate is 15 percent? Answer is complete but not entirely correct. Taxes Dus $ 26,250 Grant date Exercise date Sale date 00 12,150
Yost received 300 NQOS (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $40 per share). At the time he started working for Cutter Corporation three years ago, Cutter's stock price was $40 per share. Yost exercised all of his options when the share price was $80 per share. Two years after acquiring the shares, he sold them at $122 per share. Note: Input all amounts as positive values. Leave no answer blank. Enter zero if applicable. b. What are Cutter Corporation's tax consequences (amount of deduction and tax savings from deduction) on the grant date, the exercise date, and the date Yost sold the shares? Grant date : Exercise date Sale date Amount of Deduction Tax Savings
Required information [The following information applies to the questions displayed below.] Yost received 300 NQOs (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $15 per share). At the time he started working for Cutter Corporation three years ago, Cutter's stock price was $15 per share. Yost exercised all of his options when the share price was $26 per share. Two years after acquiring the shares, he sold them at $47 per share. Note: Input all amounts as positive values. Leave no answer blank. Enter zero if applicable. b. What are Cutter Corporation's tax consequences (amount of deduction and tax savings from deduction) on the grant date, the exercise date, and the date Yost sold the shares? X Answer is complete but not entirely correct. Amount of Deduction Grant date Exercise date Sale date $ $ $ 0 $ 2,700 × $ 0 Tax Savings 0 693 0
Maren received 11 NQOs (each option gives her the right to purchase 11 shares of stock for $9 per share) at the time she started working when the stock price was $7 per share. When the share price was $16 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $21 per share in 2023. How much gain will Maren recognize on the sale of the shares? (Do not use dollar sign or other punctuation.)
Required information [The following information applies to the questions displayed below.] Mark received 10 ISOs (each option gives him the right to purchase 16 shares of Hendricks Corporation stock for $6 per share) at the time he started working for Hendricks Corporation five years ago, when Hendricks's stock price was $5 per share. Now that Hendricks's share price is $35 per share, Mark intends to exercise all of his options and hold all of his shares for more than one year. Assume that more than a year after exercise, Mark sells the stock for $35 a share. (Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable.) a. What are Mark's taxes due on the grant date, the exercise date, and the date he sells the shares, assuming his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? Grant date Exercise date Sale date Taxes Due
! Required information [The following information applies to the questions displayed below.] Haven received 200 NQOs (each option gives him the right to purchase 20 shares of Barlow Corporation stock for $7 per share) at the time he started working for Barlow Corporation three years ago when its stock price was $7 per share. Now that Barlow's share price is $50 per share, he intends to exercise all of his options. After acquiring the 4,000 Barlow shares with his options, he intends to hold the shares for more than one year and then sell the shares when the price reaches $75 per share. (Leave no answer blank. Enter zero if applicable. Input all amounts as positive values.) b. What are the cash flow effects for Barlow Corporation resulting from Haven's option exercise? How would it change if Barlow's marginal rate were 0 percent? Date Tax benefit on grant date Tax benefit in year of exercise Tax benefit in year of sale Tax benefit when tax rate is 0% Amount
Jacob Smale works for Drummond Corp (a small CCPC). In 2019 Jacob received stock options that gave him the ability to purchase 1,000 shares at a price of $55/share. At the time of stock option issuance, the market price of shares was $50/share. On July 7, 2020 the market price was $66/share. Jacob decided to exercise his options on this day. On December 12, 2020 Jacob sold the shares for $74/share. Required: A) Čalculate the impact to taxable income this will have on Jacob's taxes in 2020.