Rick Recently Received 500 Shares of Restricted Stock from His

question 97

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 24 percent, what is the amount of Rick's income inclusion and tax liability upon the sale of the stock?

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Definitions:

Language

The systematic, meaningful arrangement of symbols, which provides the basis for communication.

Information Processing

The approach by which human beings take in, use, and store information, akin to how computers process data.

Sign Language

A form of communication using gestures, body language, and facial expressions rather than sounds, for people who are deaf or hard of hearing.

Phonemes

The smallest units of sound in a language that can distinguish one word from another.