Tobey Receives 1,000 Shares of YouDog! Stock as Part of His

question 232

Multiple Choice

Tobey receives 1,000 shares of YouDog! stock as part of his compensation package. Tobey's employment contract with YouDog!, Inc., states that if he leaves before completion of three years of employment, he will forfeit the stock. The stock currently has a fair market value of $12 per share. Which of the following statements regarding Tobey's choices is not true?

• A) Tobey may elect to report the $12,000 FMV of the stock as ordinary income in the current year.
• B) Tobey must report $12,000 as income due to the receipt of the stock in the current year.
• C) Tobey does not have to recognize any income from receiving the stock until his rights to the stock are fully vested.
• D) If Tobey elects to report $12,000 as income in the current year and the stock price falls to $5 per share when his rights to the stock are vested, Tobey is not allowed to deduct a loss.

---

Definitions:

Organizational Performance

The analysis of a company's performance against its goals and objectives, often evaluated through financial metrics, productivity, and efficiency.

Task Analysis

The process of breaking down a task into its component steps or operations to understand the skills and knowledge required to perform it.

Needs Analysis

The process of identifying and evaluating the needs of a specific group of people or organization to determine necessary actions for performance improvement.

Stakeholder Consultation

A process where stakeholders are given the opportunity to contribute their opinions and insights towards a project or decision before it is finalized.