Purchase the companys at the same price offered by the public market on that day

Posted: March 29th, 2022

Determine the dollar amount of the book – tax difference (if any) written as a positive number 2015 On January 1, 1998Landmark Corporation offered its CFO 2.000 NQOs options to purchase the company’s at the same price offered by the public market on that day, S15/share, at any date in the future after the CFO vests. The CFO will vest 25 % of its options in 1998, 25 % in 1999, and vest the remaining portion in 2017. The CFO promptly exercised all of his options on December 31 when he was 100 % vested and turned around and sold all the shares for the public market Assume that on the grant date, Landmark Corporation estimated the value of the options would be S10 / share. The company uses a calendar year tax period. what is the book-tax difference in 1998?

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