Rick Recently Received 500 Shares of Restricted Stock from His

question 100

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.Assuming that Rick made an election under section 83(b)when the stock was granted and that his marginal tax rate is 30 percent,what is the amount of Rick's income inclusion and tax liability upon the sale of the stock?

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Definitions:

External Locus of Control

A psychological concept suggesting that individuals believe external forces or circumstances primarily determine their life events and outcomes.

Situational

Related to or dependent on a particular set of circumstances or context.

Dispositional

Relating to the inherent qualities, traits, or tendencies that contribute to a person's enduring behavior patterns or characteristics.

Psychodynamic Theory

A psychological perspective that emphasizes unconscious processes and past experiences as determinants of an individual's behavior and personality.