Determine the tax effect of the transactions

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Question - Several years ago, Mr. B's employer gave him options to purchase 1,000 shares of the employer's stock at a price of $24 per share.  At that time, the shares were trading at $20 per share.

The employer is a publicly traded company.  During April 2020, Mr. B exercises the options.  At this time, the shares are trading at $26.50 per share.  During July 2021, Mr. B sells the shares for $40 per share.

Required - Determine the tax effect of the transactions that took place during 2020 and 2021 for Mr. B's Net Income For Tax Purposes (NIFTP) and Taxable Income.

Reference no: EM133114347

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