Exam 4: Employee Compensation

Harris Corporation granted Tyler 1,000 stock appreciation rights in 2014 when the stock was selling for $25 per share.In 2019, when the stock is selling for $60 per share, Tyler exercises these rights.How much income does Tyler recognize and in which year?

Which of the following is not taxable to an employee when paid for by the employer?

If an employer insists that an employee move from New York to California, all direct and indirect costs incurred by the taxpayer and paid by the employer would result in no income to the employee.

ABC Corporation awarded John 1,000 options in 2015; each option allows him to purchase one share of ABC Corporation stock for $20.The ABC stock was selling for $18 per share at the grant date.In 2017, John exercised the options when the stock's selling price was $40 per share.In 2019, John sells the stock for $50 per share.How much income does John recognize in 2017 when he exercised the options if they are incentive stock options?

Brianna received 600 shares of her employer's stock as a bonus.She must return the stock to the company if she leaves before the 4-year vesting period ends.The fair market value of the stock at the time it was issued was $15,000.After 4 years, the stock vests when its fair market value is $32,000.Two years after vesting, Brianna sells the stock for $44,000.If Brianna makes no special election, how much income or gain does she recognize when she sells the stock?

An employee who receives an incentive stock option normally recognizes no income until the stock acquired with the option is sold.

Tom, a calendar-year taxpayer, worked in Japan from July 1, 2018 through June 30, 2019.He earned $80,000 in 2018 and $90,000 in 2019 while in Japan.The maximum foreign earned income exclusion amount is $103,900 for 2018 and $105,900 for 2019.Which of the following statements is true?

In 2016 Martinez Corporation granted nonqualified stock options to Shawn to buy 1,000 shares of Martinez stock at $15 per share exercisable for six years.At the date of grant, the stock was selling for $10 per share.In 2018 Shawn exercises the options when the market price is $40 per share.In 2019, Shawn sells the 1,000 shares of stock for $42 per share.How much is the deduction that Martinez Corporation is allowed and in which year?

All employee fringe benefits are tax free

Which of the following is a reason a person would prefer to be an independent contractor?

Which one of the following employee benefits can a staff accountant exclude from income?