2. Mary Tutoring Ltd, a CCPC, issued 100 stock options to Tony Chung, an employee...
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2. Mary Tutoring Ltd, a CCPC, issued 100 stock options to Tony Chung, an employee of the company on January 15, 2016. The options have an exercise price of $10 per share. The Fair Market value at the grant date was $12 per share. On December 1, 2018, the options were exercised when the shares were worth $14 per share. On January 25, 2019 the company went bankrupt: Which one of the following statements is correct? a. As Tony did not receive any proceeds, he will record a capital loss of $1,000 in his 2019 tax return. b. Tony will recognize $400 of employment income and a capital loss of $1,400 but will get a $200 110(1)(d.1) deduction to taxable income as he held the options for greater than 2 years in his 2019 tax return. C. Tony will recognize a $400 of employment income in his 2018 tax return and will recognize a capital loss of $1,400 in his 2019 tax return d. Tony will recognize $400 in taxable income in his 2019 tax return None of the above e
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