Rick Recently Received 500 Shares of Restricted Stock from His

question 92

Short Answer

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 sale of the stock? Assuming a marginal tax rate of 30 percent, what is Rick's tax on the sale of the stock?

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Definitions:

Ethical

Pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.

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Directive

A formal instruction or order given by someone in authority, often used in organizational or governmental contexts.