Rick Recently Received 500 Shares of Restricted Stock from His

question 39

Essay

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later, when the market price was $12. Rick held the shares for a little more than a year and sold them when the market price was $15. What is the amount of Rick's income on the vesting date? Assuming a marginal tax rate of 32 percent, what is Rick's tax on the restricted stock?

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Definitions:

Modus Ponens

A form of deductive reasoning that asserts if a conditional statement "If P, then Q" is accepted as true and P is true, then Q must also be true.

Modus Tollens

A method of logical argument that infers the falsehood of a proposition from the impossibility of its consequence.

Hypothetical Syllogism

A form of reasoning where if the first condition holds, then the second condition must follow, leading to a conclusion if the initial hypothesis is true.

Fossils

The preserved remains or traces of animals, plants, and other organisms from the remote past.