If the Special Election Under § 83(b) Is Made as a Result

question 81

Multiple Choice

If the special election under § 83(b) is made as a result of a restricted property transaction, which statement is false?

• A)A factor supporting making the § 83(b) election is the expectation the property will appreciate substantially.
• B)Ordinary income is recognized on the excess of the FMV over the amount paid for the property on the date received.
• C)Any appreciation on the property after receipt is treated as capital gain.
• D)A deduction is allowed to the employee for any taxes paid on the original amount included in gross income if the property is subsequently forfeited.
• E)None of the above is false.

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Definitions:

SEC Rule 10b5-2

A regulation established by the Securities and Exchange Commission (SEC) that clarifies the definition of insider trading, particularly in relation to the misuse of non-public information.

Negligence

The failure to take reasonable care to avoid causing injury or loss to another person.

Over The Counter

Financial securities that are traded directly between parties, typically through a dealer network, as opposed to on a centralized exchange.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.