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What amount will he include in taxable income

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Question - An executive receives options to purchase 1,000 of his employer's common shares at an option price of $25 per share. At the time, the shares are trading at $25 per share. He exercises the options when the shares are trading at $40 and in the following year, sells his shares at $50 per share.

What amount will he include in "Net Income for Tax Purposes"?

What amount will he include in "Taxable Income"?

Will there be a Capital Gain when he sells them and if so, what is the amount?

Reference no: EM133171580

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