How much gain will maren recognize on the sale of the shares

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Problem 1: Maren received 12 NQOs (each option gives her the right to purchase 11 shares of stock for $10 per share) at the time she started working when the stock price was $8 per share. When the share price was $17 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $20 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent?

Multiple Choice

A- $0 gain and $0 tax.
B- $396 gain and $79 tax.
C- $1,320 gain and $264 tax.
D- $396 gain and $147 tax.

Reference no: EM132877274

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