Recognize income from the sar

Reference no: EM13972862

A stock appreciation right (SAR) entitles the holder of the right to a cash payment equal to the difference between the fair market value of the stock on the date the SAR is exercised and the fair market value of a share on the date the SAR is granted. In 2008, L&M Corporation grants 1,000 SARs to Jasmine, an employee of SAR. On the date of the grant, the L&M stock sells for $30 per share. On December 31, 2008, the stock sells for $40; it sells for $50 on December 31, 2009, and for $55 on Decem- ber 31, 2010. Jasmine exercises the SARs on December 31, 2010. When does she recognize income from the SARs, and what is the character of the income recognized?

Reference no: EM13972862

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