Question

[Q6] Mark received 10 ISOs (each option gives him the right to purchase 12 shares of Hendricks Corporation stock for $8 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	0
Exercise date	0
Sale date	???

Answer 1

Thank you

Ans I-Grsamt date ON 9rant date the opions Just amted hem ce maok will not hale amy tax Comseguence 2 EXescise date on this date marsk will de cogmize Alterate mimmum tax Numbr of Shases (l0 x12) (a) 120 Srager Exescise price (b) Paice c- axb Total Exercise $ 960 marsket (0) Price 35 market Value f Shades (E = axd) $4200 Armoumt fs AMT 4200-960) $3240 AmT is within exemption imit Sime Hea Will be uo Tax Sale date Im 3- mark recognizes the long teom year of Sale Cafital gam 120 shaaes umber of Shader per share 35 4200 (960) maket vellue market value (20x35) Total of al Shares cast Long erm Capital Gain $ 3 240 TCG 3240x15 $486

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