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 $38 per share when his shares vest and $43 per share when he sells them. Assume that Dave's price predictions are correct, and answer the following questions:

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 $38 per share when his shares vest and $43 per share when he sells them. Assume that Dave's price predictions are correct, and answer the following questions:

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 52P

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Required information [The following information applies to the questions displayed below.] On January 1, year 1, Dave received 2,400 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $16 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 $40 per share when his shares vest and will be $50 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? Answer is complete but…
On January 1, year 1, Dave received 2,200 restricted shares from his employer, RRK Corporation. On that date, the stock price was $18 per share. On receiving the 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 $29 when his shares vest and will be $56 per share when he sells them. Assume that Dave's predictions are correct and answer the following question. What are the consequences of these transactions to RRK? Grant Date $ Vesting Date $ Sale Date $
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On January 1, year 1, Dave received 2,750 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $18 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 $28 per share when his shares vest and $41 per share when he sells them. Assume that Dave's price predictions are correct, and answer the following questions: Note: Leave no answers blank. Enter zero if applicable. Round your final answer to the nearest whole dollar value. Enter all amounts as positive values. Required: 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? b. What are the tax consequences of these transactions to RRK? Complete this question by entering your…
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