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:

Divine Figure

A supreme being or deity revered in various religions and spiritual traditions, often attributed with the creation and governance of the universe.

Secular

Nonreligious; a secular society separates church and state and does not endorse any religion.

Secular Society

A society where religious beliefs and institutions do not have a dominant influence on public life and governance.

Church and State

The concept referring to the distinct separation of religious institutions and governmental entities, to ensure religious freedom and neutrality in governance.