The date the shares are sold assuming his ordinary marginal


Yost received 300 NQOs (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $15 per share) at the time he started working for Cutter Corporation three years ago. Cutter's stock price was $15 per share. Yost exercises all of his options when the share price is $26 per share. Two years after acquiring the shares, he sold them at $47 per share. Assume that Yost's options were exercisable at $20 and expired after five years. If the stock only reached $18 dollars during its high point during the five-year period, what are Yost's tax consequences on the grant date, the exercise date, and the date the shares are sold, assuming his ordinary marginal rate is 35 percent and his long-term capital gains rate is 15 percent? Income amount and tax due.

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Accounting Basics: The date the shares are sold assuming his ordinary marginal
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