Jackie receives incentive stock options (ISOs) with an exercise price equal to the FMV at the date of the grant of $22. Jackie exercises these options 3 years from the date of the grant when the FMV of the stock is $30. Jackie then sells the stock 3 years after exercising for $35. Which of the following statements is (are) true?
1. At the date of grant, Jackie will have ordinary income equal to $22.
2. At the date of exercise, Jackie will have W-2 income of $8.
3. At the date of sale, Jackie will have long-term capital gain of $13.
4. Jackie's employer will not have a tax deduction related to the grant, exercise or sale of this ISO by Jackie.
a. 3 only.
b. 3 and 4.
c. 2, 3, and 4.
d. 1, 2, and 4.