On January 1, year 1, Dave received 1,100 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $26 per share. On receiving the restricted stock, Dave made the 83(b) election. Dave's restricted shares will vest at the end of year 2. He intends to hold the shares until the end of year 4 when he intends to sell them to help fund the purchase of a new home. Dave predicts the share price of RRK will be $46 per share when his shares vest and will be $49 per share when he sells them. Assume that Dave's price predictions are correct and answer the following questions: (Leave no answers blank. Enter zero if applicable. Round your final answer to the nearest whole dollar value. Enter all amounts as positive values.) a. What are Dave's taxes due if his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? Taxes Due Grant date Vesting date Sale date

SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
Publisher:YOUNG
Chapter19: Deferred Compensation
Section: Chapter Questions
Problem 52P
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[The following information applies to the questions displayed below.]
On January 1, year 1, Dave received 1,100 shares of restricted stock from his employer, RRK Corporation. On that date, the
stock price was $26 per share. On receiving the restricted stock, Dave made the 83(b) election. Dave's restricted shares
will vest at the end of year 2. He intends to hold the shares until the end of year 4 when he intends to sell them to help
fund the purchase of a new home Dave predicts the share price of RRK will be $46 per share when his shares vest and
will be $49 per share when he sells them. Assume that Dave's price predictions are correct and answer the following
questions: (Leave no answers blank. Enter zero if applicable. Round your final answer to the nearest whole dollar
value. Enter all amounts as positive values.)
a. What are Dave's taxes due if his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent?
Taxes Due
Grant date
Vesting date
Sale date
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] On January 1, year 1, Dave received 1,100 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $26 per share. On receiving the restricted stock, Dave made the 83(b) election. Dave's restricted shares will vest at the end of year 2. He intends to hold the shares until the end of year 4 when he intends to sell them to help fund the purchase of a new home Dave predicts the share price of RRK will be $46 per share when his shares vest and will be $49 per share when he sells them. Assume that Dave's price predictions are correct and answer the following questions: (Leave no answers blank. Enter zero if applicable. Round your final answer to the nearest whole dollar value. Enter all amounts as positive values.) a. What are Dave's taxes due if his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? Taxes Due Grant date Vesting date Sale date
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[The following information applies to the questions displayed below]
On January 1, year 1, Dave received 1100 shares of restricted stock from his employer, RRK Corporation. On that date, the
stock price was $26 per share. On receiving the restricted stock, Dave made the 83(b) election. Dave's restricted shares
will vest at the end of year 2. He intends to hold the shares until the end of year 4 when he intends to sell them to help
fund the purchase of a new home. Dave predicts the share price of RRK will be $46 per share when his shares vest and
will be $49 per share when he sells them. Assume that Dave's price predictions are correct and answer the following
questions: (Leave no answers blank. Enter zero if applicable. Round your final answer to the nearest whole dollar
value. Enter all amounts as positive values.)
b. If Dave's stock price predictions are correct, What are the tax consequences of these transactions to RRK?
Tax Benefit
Grant date
Vesting date
Sale date
Transcribed Image Text:Help [The following information applies to the questions displayed below] On January 1, year 1, Dave received 1100 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $26 per share. On receiving the restricted stock, Dave made the 83(b) election. Dave's restricted shares will vest at the end of year 2. He intends to hold the shares until the end of year 4 when he intends to sell them to help fund the purchase of a new home. Dave predicts the share price of RRK will be $46 per share when his shares vest and will be $49 per share when he sells them. Assume that Dave's price predictions are correct and answer the following questions: (Leave no answers blank. Enter zero if applicable. Round your final answer to the nearest whole dollar value. Enter all amounts as positive values.) b. If Dave's stock price predictions are correct, What are the tax consequences of these transactions to RRK? Tax Benefit Grant date Vesting date Sale date
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