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Basic Stock Option Benefit Visualizer
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Made by: Ben Ma, CPA, CFA, CFP
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Disclaimer: This is a basic visualizer for educational purposes only - and does not consider more complex situations or facts which may be particular to you. Please contact an accountant for your own situation
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Strike Price
Benefit
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Option $ 12.00 $ 2.50 $ 3.00
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Market Value @ Exercise $ 17.00
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FactsMarket Value at Sale $ 20.00
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Grant Price $ 14.00
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Strike Price $ 12.00
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Market Price at Strike Date
 $ 17.00
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Market Price at Sale Date
 $ 20.00
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Taxable Benefit
*Note that the grant price doesn't matter in this calculation!
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Market Price at Strike Date
 $ 17.00
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Strike Price $ 12.00
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Division C Stock option deduction
 $ (2.50)
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Employment Income (net of deduction)
 $ 2.50
Who in their right mind would exercise a call option at a loss? That would never happen.
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Capital Gain*We have to pick up the employment income earned from the taxable benefit, and add it to the strike price
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Sale Price $ 20.00
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Market Price at Strike Date
 $ 17.00
Which equals the market price at strike date!
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Capital Gain (Loss)
 $ 3.00
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