Rick recently received 570 shares of restricted stock from his employer, Crazy C

Question

Rick recently received 570 shares of restricted stock from his employer, Crazy Corporation, when the share price was $19 per share. Rick's restricted shares vested three years later when the market price was $26. Rick held the shares for a little more than a year after vesting and sold them when the market price was $29. 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

Explanation / Answer

Solution :- Compensation income amount of Rick = 570 * 19 (Market price of share as on the grant date)

= $ 10830.

Tax liability of Rick = 10830 * 30 %

= $ 3249.

Conclusion :-

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