Five years ago in March, Kelley Incorporated issued 1,000 shares of its publicly traded stock as compensation to its employee, Thomas. On the date of issuance, the stocks fair market value was $20,000. Under the terms of his employment contract, Thomas could not dispose of the stock or terminate his employment with Kelley before March of the current year. Otherwise, he had to forfeit the stock back to Kelley. Thomas did not make an election to recognize income in the year of receipt. The restrictions lapsed in March of the current year when Thomas was still a Kelley employee and the value of the stock was $35,000. In December of the current year, Thomas sold all 1,000 shares for the