DISQUALIFYING DISPOSITION: EXAMPLE (1 of 2)
01.Core Concepts
• On October 12, 2025, Donald was granted 15,000 ISOs at an exercise price of $2 per share when the fair market value of the stock was also equal to $2. On November 14, 2026, Donald exercised the stock when the fair market value was $8 per share. On January 1, 2027, Donald sold all the stock for $6 per share. • What are the tax consequences at grant, exercise, and sale? AMT Regular Tax Date At Grant 10-12-25 At Exercise: 11-14-26 Taxable amount Basis At Sale: 1-1-27 Sale price -B a s i s = Gain