Tom recently received 2,060 shares of restricted stock from his employer, Independence Corporation, when the share price was $10 per share. Tom's restricted shares vested three years later when the market price was $14. Tom held the shares for a little more than a year and sold them when the market price was $12. What is the amount of Tom's income or loss on the sale? Multiple choice $0 $2,060 loss $4,120 gain $4120 loss

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter22: S Corporations
Section: Chapter Questions
Problem 51P
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Tom recently received 2,060 shares of restricted stock from his employer, Independence Corporation, when the share price was $10 per share. Tom's restricted shares vested three years later when the market price was $14. Tom held the shares for a little more than a year and sold them when the market price was $12. What is the amount of Tom's income or loss on the sale?

Multiple choice

$0

$2,060 loss

$4,120 gain

$4120 loss

 

Expert Solution
Step 1

Income or loss:- When a sale amount is more than the actual cost then it is said to be income and if the sales amount is less than the actual cost then it is said to be a loss.

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