Test - Senior Tax Specialist Certification Test (2018) Investment Income, Genera

Question

Test - Senior Tax Specialist Certification Test (2018) Investment Income, General Question 35 of 75. How is compensation from the exercise of nonstatutory stock options reported on Form W-2 if compensation is N OT recognized on the date of the grant? The spread between the: O Grant price of the stock over the fair market value at the time of vesting is shown as a "V" in box 12. O Grant price of the stock over the exercise price at the time of vesting is shown as a "V in box 12. O Fair market value of the stock over the exercise price at the time of exercise is shown as a "V" in box 12 O Grant price of the stock over the exercise price at the time of exercise is shown as a "V in box 12. ?Mark for follow up Question 36 of 75 0 1017 for $500, The option gave him the right to buy 100 shares o ef tho stock was $48 a s

Explanation / Answer

Correct Ans:

Form W-2 shows the bargain element which is the difference between exercise price and the stock value which is taxable to the employees, whereas Box 12 of Form W-2 shows code "V" which reports income from exercise of non statutory stock option.

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