Question

Martin received a nonstatutory stock option from his employer on January 1, 2018. The option gives him the right to purchase 100 shares of his company's stock at $11 per share. The option is not traded on an established market, and its value could not be readily determined when it was granted. Although Martin did not exercise his option during the tax year, the value of the stock increased after he received the option. On December 31, 2018, the stock was trading at $20 per share. How much compensation does Martin include in his 2018 income as a result of being granted this option?a.$0 b.$900 c.$1,100 d.$2,000

Answer 1

Correct answer is option A

$0

Step-by-step explanation:

In case of non-statutory stock option, income which is fair market value less any cost incurred for stock options, is included when the stock options are exercised.