Sunday, May 5, 2024
Specific Property Gifts

4.13.1 Basic Quiz -- Incentive Stock Options
Stock options are a popular way that corporations attract and retain key personnel.
     True      False
If someone has a stock option, then it has to be an incentive stock option (ISO).
     True      False
Under an ISO plan, an employee purchases stock options at a discount from the corporation.
     True      False
The option price must not be less than the stock's fair market value at the time the option is granted.
     True      False
Since the corporation granted the option to the employee, the corporation decides when, where and whether or not the employee can exercise his or her option.
     True      False
An employee must exercise an ISO within 15 years of the grant date.
     True      False
After an employee exercises an ISO, he or she is subject to a holding period.
     True      False
Because an ISO is a form of compensation, an employee will be subject to ordinary income tax rates upon the eventual sale of the company stock.
     True      False
An employee must realize income when an ISO is granted to him or her because it is a valuable property right.
     True      False
An employee may transfer an ISO to charity or a planned gift during life.
     True      False



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