of exercise, the value of the stock is 20.

0 The employee sells the stock for 40 in a subsequent year. The employee is a resident of, and performs services in, either Japan or the United States throughout the period between grant and exercise.

0 The employee is a resident of either Japan or the United States in the year the stock option is exercised and in the year the stock is sold.

Fact pattern 1. The employee is a resident of Japan in the year of exercise and the year of sale. The period between grant and exercise is five years; the employeeis a resident of, and performs services in, the United States for four of those years and Japan for one of those years.

Fact pattern 2. The employee is a resident of the United States in the year of exercise and the year of sale. The period between grant and exercise is five years; the employee is a resident of, and performs services in, Japan for four of those years and the United States for one of those years.

Fact pattern 3. The employee is a resident of Japan in the year of exercise and a resident of the United States in the year of sale. The period between grant and exercise is five years; the employee is a resident of, and performs services in, the United States for four of those years and Japan for one of those years.