C. Assuming Pratt chooses Option 3 and sells the stock on the vesting date on the last day of year 1). complete Pratt's Schedule D and Form 8949 for the sale of the restricted stock. (Input all the values as positive numbers. Use 2020 tax rules regardless of year on tax form.) Required information [The following information applies to the questions displayed below.] Pratt is ready to graduate and leave College Park. His future employer (Ferndale Corp. offers the following four compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January 1. year 1. Benefit Description Option 1 Option 2 Option 3 Option 4 Salary $ 60,00 $45, eee $45, eee Health insurance No coverage $ 5,eee $ 5,600 $ 5,00 Restricted stock 1,eee shares NQO'S 188 options $ 50,eee @ Assume that the restricted stock is 1.000 shares that trade at $5 per share on the grant date (January 1. year 1): shares are expected to be worth $10 per share on the vesting date at the end of year t; and no 83(b) election is made. Assume that the NGOs (100 options) each allows the employee to purchase 10 shares at $5 exercise price. The stock trades at $5 per share on the grant date January 1. year 1) and is expected to be worth $10 per share on the vesting date at the end of year 1, and the options are exercised and sold at the end of the year. Also assume that Pratt spends on average $3.000 on health-related costs that will be covered by Insurance If he had coverage or is an after-tax expense If he isn't covered by Insurance treat this as a cash outflow). Assume that Pratt's marginal tax rate is 35 percent. (Ignore FICA taxes and time value of money considerations). (h) Gain or loss) Subtract column (e) from column (d) and combine the result with column (9) Pratt Did you dispose of any investment(s) in a qualified opportunity fund during the tax year? Yes No If "Yes," attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss. Part 1 Short-Term Capital Gains and LossesGenerally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines below. (9) Adjustments to (d) Proceeds (sales (e) Cost (or other gain or loss from price This form may be easier to complete if you round off cents to whole dollars. basis) Forms)949, Parti line 2 column () 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 16 1b Totals for all transactions reported on Form(s) 8949 with Bax A checked 2 Totals for all transactions reported on Form(s) 8949 with Bax B checked 3 Totals for all transactions reported on Form(s) 8949 with Bax C checked 4 Short-term gain from Form 6252 and short-term gain or loss) from Farms 4684,8781, and 8824 5 Net short-term gain or loss) from partnerships, Scorporations, estates, and trusts from Schedule(s) K-1 8 Short-term capital loss carryaver. Enter the amount, if any, from line 8 of your Capital Loss Carryaver Worksheet in the instructions 7 Net short-term capital gain or loss). Combine lines 1a through in calumn (h). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part Ill on the back Part II Long-Term Capital Gains and LossesGenerally Assets Held More Than One Year (see instructions) See instructions for how to figure the amounts to enter on the lines below. (9) Adjustments to (d) Proceeds (sales (e) Cost (or other gain or loss fram price) This form may be easier to complete if you round off cents to whale dollars. basis) Form(s) 8949. Part II, line 2 column (g) &a Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line ab Sb Totals for all transactions reported on Form(s) 8949 with Box D checked 9 Totals for all transactions reported on Form(s) 8949 with Bax Echecked 10 Totals for all transactions reported on Form(s) 8949 with Bax F checked 11 Gain from Form 4797, Part ; long-term gain from Forms 2439 and 6252and long-term gain ar (loss) from Farms 4684,6781, and 8824 12 Net long-term gain or loss) from partnerships, Scorporations, estates, and trusts from Schedule(s) K-1 13 Capital gain distributions. See the instructions 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Lass Carryover Worksheet in the instructions 15 Netlong-term capital gain or loss). Combine lines &a through 14 in column (h). Then go to Part Ill on the back Car An Dautin Anta AAA LAH Hraden Intan (h) Gain or loss) Subtract column (e) from column (d) and combine the result with column (g) 11 12 13 14 15 Daha IEA 1 nr 4 00040 Pratt Before you check Box A, B, or below, see whether you received any Fom(s) 1000-5 or substitute statement(s) from your broker. A substitute statement will have the same information as For 1090-8. Either wW Show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check Parti Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long-term transactions, see page 2 Note: You may aggregate al short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments ar codes are required. Enter the totals directly on Schedule D line 1a; you aren't required to report these transactions on Form 8949 (see instructions) You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 949, page 1. for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need (A) Short-term transactions reported on Forms) 1099-B showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1999-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Adjustment, if any, to gain or loss. If you enter (h) Gain or loss). (e) Cost or other basis. an amount in calumn().enter a code in Subtract column (e) See the Nate below and (a) Description of property (d) Proceeds (sales from column(d) and Date sold or disposed of calurin (h). See the separate instructions. (b) Date acquired (Ma, price) (see see Column (e) in the (Example: 100 sh.XYZ Co.) combine the result with day, yr.) (Mo., day. y.) instructions) separate instruction (9) Amount of (1) Code(s) from instructions adjustment column() 1 0 2 Totals. Add the nounts in columns (d), (e), (g) and (h) (subtract negative amounts). Enter each total here and include on your Schedule D. line 1b (if Bax A above is checked), line 2 (if Box B above is checked). ar line 3 (if Box Cabove is checked) C. Assuming Pratt chooses Option 3 and sells the stock on the vesting date on the last day of year 1). complete Pratt's Schedule D and Form 8949 for the sale of the restricted stock. (Input all the values as positive numbers. Use 2020 tax rules regardless of year on tax form.) Required information [The following information applies to the questions displayed below.] Pratt is ready to graduate and leave College Park. His future employer (Ferndale Corp. offers the following four compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January 1. year 1. Benefit Description Option 1 Option 2 Option 3 Option 4 Salary $ 60,00 $45, eee $45, eee Health insurance No coverage $ 5,eee $ 5,600 $ 5,00 Restricted stock 1,eee shares NQO'S 188 options $ 50,eee @ Assume that the restricted stock is 1.000 shares that trade at $5 per share on the grant date (January 1. year 1): shares are expected to be worth $10 per share on the vesting date at the end of year t; and no 83(b) election is made. Assume that the NGOs (100 options) each allows the employee to purchase 10 shares at $5 exercise price. The stock trades at $5 per share on the grant date January 1. year 1) and is expected to be worth $10 per share on the vesting date at the end of year 1, and the options are exercised and sold at the end of the year. Also assume that Pratt spends on average $3.000 on health-related costs that will be covered by Insurance If he had coverage or is an after-tax expense If he isn't covered by Insurance treat this as a cash outflow). Assume that Pratt's marginal tax rate is 35 percent. (Ignore FICA taxes and time value of money considerations). (h) Gain or loss) Subtract column (e) from column (d) and combine the result with column (9) Pratt Did you dispose of any investment(s) in a qualified opportunity fund during the tax year? Yes No If "Yes," attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss. Part 1 Short-Term Capital Gains and LossesGenerally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines below. (9) Adjustments to (d) Proceeds (sales (e) Cost (or other gain or loss from price This form may be easier to complete if you round off cents to whole dollars. basis) Forms)949, Parti line 2 column () 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 16 1b Totals for all transactions reported on Form(s) 8949 with Bax A checked 2 Totals for all transactions reported on Form(s) 8949 with Bax B checked 3 Totals for all transactions reported on Form(s) 8949 with Bax C checked 4 Short-term gain from Form 6252 and short-term gain or loss) from Farms 4684,8781, and 8824 5 Net short-term gain or loss) from partnerships, Scorporations, estates, and trusts from Schedule(s) K-1 8 Short-term capital loss carryaver. Enter the amount, if any, from line 8 of your Capital Loss Carryaver Worksheet in the instructions 7 Net short-term capital gain or loss). Combine lines 1a through in calumn (h). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part Ill on the back Part II Long-Term Capital Gains and LossesGenerally Assets Held More Than One Year (see instructions) See instructions for how to figure the amounts to enter on the lines below. (9) Adjustments to (d) Proceeds (sales (e) Cost (or other gain or loss fram price) This form may be easier to complete if you round off cents to whale dollars. basis) Form(s) 8949. Part II, line 2 column (g) &a Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line ab Sb Totals for all transactions reported on Form(s) 8949 with Box D checked 9 Totals for all transactions reported on Form(s) 8949 with Bax Echecked 10 Totals for all transactions reported on Form(s) 8949 with Bax F checked 11 Gain from Form 4797, Part ; long-term gain from Forms 2439 and 6252and long-term gain ar (loss) from Farms 4684,6781, and 8824 12 Net long-term gain or loss) from partnerships, Scorporations, estates, and trusts from Schedule(s) K-1 13 Capital gain distributions. See the instructions 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Lass Carryover Worksheet in the instructions 15 Netlong-term capital gain or loss). Combine lines &a through 14 in column (h). Then go to Part Ill on the back Car An Dautin Anta AAA LAH Hraden Intan (h) Gain or loss) Subtract column (e) from column (d) and combine the result with column (g) 11 12 13 14 15 Daha IEA 1 nr 4 00040 Pratt Before you check Box A, B, or below, see whether you received any Fom(s) 1000-5 or substitute statement(s) from your broker. A substitute statement will have the same information as For 1090-8. Either wW Show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check Parti Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long-term transactions, see page 2 Note: You may aggregate al short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments ar codes are required. Enter the totals directly on Schedule D line 1a; you aren't required to report these transactions on Form 8949 (see instructions) You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 949, page 1. for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need (A) Short-term transactions reported on Forms) 1099-B showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1999-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Adjustment, if any, to gain or loss. If you enter (h) Gain or loss). (e) Cost or other basis. an amount in calumn().enter a code in Subtract column (e) See the Nate below and (a) Description of property (d) Proceeds (sales from column(d) and Date sold or disposed of calurin (h). See the separate instructions. (b) Date acquired (Ma, price) (see see Column (e) in the (Example: 100 sh.XYZ Co.) combine the result with day, yr.) (Mo., day. y.) instructions) separate instruction (9) Amount of (1) Code(s) from instructions adjustment column() 1 0 2 Totals. Add the nounts in columns (d), (e), (g) and (h) (subtract negative amounts). Enter each total here and include on your Schedule D. line 1b (if Bax A above is checked), line 2 (if Box B above is checked). ar line 3 (if Box Cabove is checked)