Rick Recently Received 500 Shares of Restricted Stock from His

question 55

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 30 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:

Mental Set

A psychological term for the framework or mindset with which an individual approaches problem-solving scenarios, which can often be influenced by past experiences and can either facilitate or inhibit the ability to solve new problems.

Software Package

A collection of computer programs, procedures, and related documentation that serve a specific function or set of functions.

Sinoatrial Node

A small group of cells in the right atrium of the heart that acts as the natural pacemaker by initiating the heartbeat.

Atrioventricular Node

A part of the electrical conduction system of the heart that coordinates the top of the heart. It plays a critical role in regulating the timing of heart contractions.