Question

"A book-tax difference at the time of exercise of non qualified employee stock options (post ASC 718) can be: (Check all that apply.)"

Answer 1

The difference between stock price and strike price is taxed on an ordinary income.

Qualified stock options are also called incentive stock options.

Non qualified stock options are not a right to perpetuity.

Step-by-step explanation:

Book Tax system is used to identify the book income and taxable income differently. The accounting base is different than the taxable income and this difference is identified to calculate final taxable income. The qualified stock options are taxed at ordinary income tax rate and capital gains tax.