Tobey Receives 1,000 Shares of YouDog! Stock as Part of His

question 11

Multiple Choice

Tobey receives 1,000 shares of YouDog! stock as part of his compensation package.Tobey's employment contract with YouDog!,Inc.,states that if he leaves before completion of three years of employment,he will forfeit the stock.The stock currently has a fair market value of $12 per share.Which of the following statements regarding Tobey's choices is not true?

• A)Tobey does not have to recognize any income from receiving the stock until his rights to the stock are fully vested.
• B)Tobey must report $12,000 as income due to the receipt of the stock in the current year.
• C)Tobey may elect to report the $12,000 FMV of the stock as ordinary income in the current year.
• D)If Tobey elects to report $12,000 as income in the current year and the stock price falls to $5 per share when his rights to the stock are vested,Tobey is not allowed to deduct a loss.

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Definitions:

Wechsler Intelligence Scale

A standardized test designed to measure human intelligence through various verbal and performance indicators.

Successful Intelligence

A theory that defines intelligence as the integration of analytical, creative, and practical abilities to achieve success according to one's personal goals and cultural context.

Robert Sternberg

An American psychologist and psychometrician known for his theory on intelligence and creativity, as well as Sternberg's Triangular Theory of Love.

Howard Gardner

An American developmental psychologist best known for his theory of multiple intelligences, which suggests people have several distinct types of intelligence.