Question
On January 1, last year, Randy was awarded 15,000 NQSOs at an exercise price of $4 per share when the fair market value of the stock was equal to $3. On April 17th of the current year, Randy exercised all of his NQSOs when the fair market value of the stock was $7 per share. At the date of exercise, what are the tax consequences to Randy?
A.$0 W-2 income, $45,000 AMT adjustment.
B.$0 W-2 income, $105,000 AMT adjustment.
C.$45,000 ordinary income, $45,000 AMT adjustment.
D.$45,000 W2, $0 AMT adjustment.