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i, 2017: A uld your answer to Part a change s e on May 1, 20197 ions. Bender Corporation grants a nonqualified stock optioso anuary 1, 2017, that entitled Penny t er share. On this date, the stock has a $100 FMV and then 2018 (when able FMV of $20 per share. Penny exercises the option on Janua $80 per f the stock is $150), and acquires 1,000 shares of the stoc re sells the Bender stock on January 1, 2020, for $200 per share. e following the tax consequences to Penny and Bender C anuary 1, 2017: January 1, 2018; and January 1, 2020? t are would your answer to Part a change if the tion had no readily ascertainable FMV? r stock were instead closely-held d the MPREHENSIVE PROBLEM and Cheryl are married, filea int return, and have no children. Dan, age 45, is a local hospital. Dan's SSN is salesman and Cheryl, age 42, is a nurse at a 20-1000 and Cheryl's SSN is 200-40-8000 and they reside at 2033 Palmetto Drive shville, TN 28034. Dan is paida any does not have an office in Nashville and es his business from his home office. During 2017, fice in his home as the pharmaceome and payroll taxes. He also maintains an the pharmaceutical comp hen he is not traveling, Dan Dan earned total come taxes were withheld, $7,750 of OASDI taxes of $4,000 federal taxes withheld were $4,000, OASDI of $2,815, and Medicare taxes of $658. compensation from his job of $125,000, on which $18,000 of federal in- , and $1,813 of Medicare taxes. State income were withheld. Cheryl earned a salary during 2017 of $45,400, on which During 2017, Dan and Cheryl had interest income from corporate bonds and bank accounts of $1,450 and qualified dividends from stocks of $5,950. Dan also actively trades stocks and had the following results for 2017 LTCG $4,900 LTCL STCG STCL (3,200) (7,800) Dan does a considerable amount of travel in connection with his job. He uses his own car and is reimbursed $0.30 per business mile. During 2017, Dan drove his car a total of 38,000 miles, of which 32,000 were business related. He also had business-related parking fees and rolls during the year of $280. Dan uses the mileage method for deducting auto ex- penses. Dan also had the following travel expenses while away from home during the year: He had no capital loss carryovers from previous years. 1,080 Entertainment of customers Laundry and cleaning150 Dan was reimbursed for the travel expenses by his employer, pursuant to an account- able plan, in the amount of $5,080. i, 2017: A uld your answer to Part a change s e on May 1, 20197 ions. Bender Corporation grants a nonqualified stock optioso anuary 1, 2017, that entitled Penny t er share. On this date, the stock has a $100 FMV and then 2018 (when able FMV of $20 per share. Penny exercises the option on Janua $80 per f the stock is $150), and acquires 1,000 shares of the stoc re sells the Bender stock on January 1, 2020, for $200 per share. e following the tax consequences to Penny and Bender C anuary 1, 2017: January 1, 2018; and January 1, 2020? t are would your answer to Part a change if the tion had no readily ascertainable FMV? r stock were instead closely-held d the MPREHENSIVE PROBLEM and Cheryl are married, filea int return, and have no children. Dan, age 45, is a local hospital. Dan's SSN is salesman and Cheryl, age 42, is a nurse at a 20-1000 and Cheryl's SSN is 200-40-8000 and they reside at 2033 Palmetto Drive shville, TN 28034. Dan is paida any does not have an office in Nashville and es his business from his home office. During 2017, fice in his home as the pharmaceome and payroll taxes. He also maintains an the pharmaceutical comp hen he is not traveling, Dan Dan earned total come taxes were withheld, $7,750 of OASDI taxes of $4,000 federal taxes withheld were $4,000, OASDI of $2,815, and Medicare taxes of $658. compensation from his job of $125,000, on which $18,000 of federal in- , and $1,813 of Medicare taxes. State income were withheld. Cheryl earned a salary during 2017 of $45,400, on which During 2017, Dan and Cheryl had interest income from corporate bonds and bank accounts of $1,450 and qualified dividends from stocks of $5,950. Dan also actively trades stocks and had the following results for 2017 LTCG $4,900 LTCL STCG STCL (3,200) (7,800) Dan does a considerable amount of travel in connection with his job. He uses his own car and is reimbursed $0.30 per business mile. During 2017, Dan drove his car a total of 38,000 miles, of which 32,000 were business related. He also had business-related parking fees and rolls during the year of $280. Dan uses the mileage method for deducting auto ex- penses. Dan also had the following travel expenses while away from home during the year: He had no capital loss carryovers from previous years. 1,080 Entertainment of customers Laundry and cleaning150 Dan was reimbursed for the travel expenses by his employer, pursuant to an account- able plan, in the amount of $5,080

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