What is the character of the income recognized

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Reference no: EM132019464

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 2015, L&M Corporation grants 1,000 SARs to Jasmine, an employee of L&M. On the date of the grant, the L&M stock sells for $30 per share. On December 31, 2015, the stock sells for $40; it sells for $50 on December 31, 2016, and for $55 on December 31, 2017. Jasmine exercises the SARs on December 31, 2017. When does she recognize income from the SARs, and what is the character of the income recognized?

Reference no: EM132019464

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