Difference between option price and sale price of the stock

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Reference no: EM133261373

Choose the response that accurately describes the amount and type of income recognized when the sale of stock acquired through an employee stock purchase plan (ESPP) does not meet the holding period requirement.

Ordinary income from compensation equal to the amount by which the fair market value at the time of exercise exceeded the option price.

Ordinary income from compensation equal to the difference between the option price and the sale price of the stock.

A short-term capital gain equal to the difference between the option price and the fair market value of the stock on the exercise date.

Reference no: EM133261373

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