How much is the adjustment he must make

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Marty Morrell exercised 1,000 incentive stock options (ISOs) of his employer, Vendor Rights, Inc. The exercise cost was $8 per option. At the same time the stock was trading for $60 per share. Marty pays the company $8,000 and, in return, receives stock valued at $60,000.

For regular income tax purposes, does Marty have to report any income when exercising ISOs? Why?

For AMT purposes, how much is the adjustment he must make?

Reference no: EM132369088

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