Rick Recently Received 545 Shares of Restricted Stock from His

question 67

Essay

Rick recently received 545 shares of restricted stock from his employer, Crazy Corporation, when the share price was $14 per share. Rick's restricted shares vested three years later, when the market price was $21. Rick held the shares for a little more than a year and sold them when the market price was $24. What is the amount of Rick's gain on the sale of the stock? Assuming a marginal tax rate of 37 percent, what is Rick's tax on the sale of the stock?

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Definitions:

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances in bank accounts.

Fed

Short for the Federal Reserve System, which is the central banking system of the United States.

Open Market Operations

Actions by a central bank to buy or sell government securities in the open market to influence the money supply and interest rates, a key tool of monetary policy.

Government Securities

Financial instruments issued by the government to finance its expenditures, offering a return to investors.