Exercise price equal to the fmv at the date of the grant

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Marguerite received nonqualified stock options (NQSOs) with an exercise price equal to the FMV at the date of the grant of $22. Marguerite exercises the options 3 years after the grant date when the FMV of the stock was $30. Marguerite then sells the stock 3 years after exercising for $35. Which of the following statements is (are) true?

  1. At the date of the grant, Marguerite will have ordinary income of $22.
  2. At the date of exercise, Marguerite will have W-2 income of $8.
  3. At the date of sale, Marguerite will have long term capital gain of $5.
  4. Marguerite's employer will have a deductible expense in relation to this option of $22.

Reference no: EM131223947

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