Rick Recently Received 500 Shares of Restricted Stock from His

question 83

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:

Accumulated Amortization

The total amount of amortization expense that has been applied to a fixed asset since its purchase.

Future Minimum Lease Payments

The total amount of payments that the lessee is expected to make under the lease agreement over its term.

Direct Financing Lease

A leasing arrangement in which the lessor purchases an asset for the lessee and rents it out, with the lease payments designed to cover the original cost plus a profit margin.

Unearned Interest: Leases

Interest that has been collected on a lease agreement before it has been earned, usually according to the payment schedule.