Rick Recently Received 500 Shares of Restricted Stock from His

question 114

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 after vesting and sold them when the market price was $15. What is the amount of Rick's compensation income if Rick made an election under section 83(b)when the stock was granted? Assuming a marginal tax rate of 35 percent, what is the amount of Rick's ordinary income amount and tax liability at the time of the income inclusion?

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Definitions:

Easier Solve

The approach or method that simplifies the process of finding a solution to a problem, making it less complex to resolve.

Simple Majority

A voting requirement where more than half of the votes cast by members entitled to vote is sufficient for decision-making.

Decision-making

The cognitive process of selecting a course of action from among multiple alternatives.

Minority Opinions

Perspectives or viewpoints held by a small segment of a group, which often differ from the dominant or majority views.