On January 1, year 1, Dave received 1,650 shares of restricted
stock from his employer, RRK Corporation. On that
date, the stock price was $25 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 $48 per share when his shares vest and
will be $51 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. If Dave’s stock price predictions are
correct, What are Dave’s taxes due if his ordinary marginal rate is
32 percent and his long-term capital gains rate is 15 percent?
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Taxes Due |
| Grant date |
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| Vesting date |
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| Sale date |
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b. If Dave’s stock price predictions are
correct, What are the tax consequences of these transactions to RRK
if its marginal rate is 21 percent?
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Tax Benefit |
| Grant date |
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| Vesting date |
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| Sale date |
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