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?

---

Definitions:

U.S. Courts of Appeals

Intermediate appellate courts in the United States federal court system that review decisions of trial courts.

Federal Courts

Courts established under the federal Constitution or laws of the United States, having jurisdiction over matters of federal law.

U.S. Supreme Court

The highest court in the United States, with ultimate appellate jurisdiction over all federal and state courts, interpreting the constitutionality of laws.

Jury Trial

A legal proceeding in which a jury makes a decision or findings of fact, which then guide the actions of a judge.