Question
Alicent recently received 1,000 shares of restricted stock from her employer, Hightower Corporation, when the share price was $8 per share. Alicent's restricted shares vested
Alicent recently received 1,000 shares of restricted stock from her employer, Hightower Corporation, when the share price was $8 per share. Alicent's restricted shares vested three years later when the market price was $11. Alicent held the shares for a little more than three years and sold them when the market price was $16. What is the amount of Alicent's ordinary income with respect to the restricted stock, assuming her marginal tax rate is 24% and she does NOT make an 83(b) election?
A. $11,000 gain and $2,640 tax.
B. $11,000 gain and $1,650 tax.
C. $0 gain and $0 tax.
D. $16,000 gain and $3,840 tax.
E. $16,000 gain and $2,400 tax.
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