PRACTITIONERS FORUM.

This article presents discusses several issues related to accounting practitioners. Where shares of stock issued pursuant to a qualified stock option plan are disposed of before the required three-year holding period, the optionee who disposes of these shares recognizes ordinary income for federal income tax purposes. The issuer of the shares is entitled to a deduction in an equivalent amount. In practice, the benefit to the issuer is treated as an addition to capital surplus and not as a reduction of the income tax provision for financial reporting purposes. Upon the disposition because of an operating loss, capital surplus would not be benefited in that period. The "magic book" to solve the problems of the new practitioner would have many chapters and might be entitled "A Complete Handbook for the New CPA Practitioner: How to Handle Every Possible and Impossible Situation." The article lists a few of the more obvious chapter titles. Some are serious, some not; some have easy answers and some have difficult or no answers.