Pony, Inc, Issues Restricted Stock to Employees in July 2019, with with a Two-Year

question 33

Multiple Choice

Pony, Inc., issues restricted stock to employees in July 2019, with a two-year vesting period and an SRF.An employee must remain a full-time employee of Pony for two years after the restricted stock is issued.The stock is trading at $10 per share when it is issued.An employee, Sam, decides to make the § 83(b) election with his 1,000 shares.At the end of 2019, the stock is trading at $13 per share.How much income, if any, must Sam recognize in 2019?

• A)$-0-.
• B)$10,000 capital gain.
• C)$10,000 ordinary income.
• D)$13,000 capital gain.
• E)$13,000 ordinary income.

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Definitions:

Forgetting

The loss of information from long-term memory, often considered a normal process due to various factors like interference, decay, or retrieval failure.

Classical Conditioning

a learning process that occurs when two stimuli are repeatedly paired; a response that is initially elicited by the second stimulus is eventually elicited by the first stimulus alone.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

CS (Conditioned Stimulus)

An initially neutral stimulus that, after being associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.