Question
Jon Snow recently received 1,000 shares of restricted stock from his employer, Stark Corporation, when the share price was $11 per share. Jon Snow's restricted
Jon Snow recently received 1,000 shares of restricted stock from his employer, Stark Corporation, when the share price was $11 per share. Jon Snow's restricted shares vested three years later when the market price was $15. Jon Snow held the shares for a little more than three years and sold them when the market price was $20. Determine the amount of Jon Snow's ordinary income with respect to the restricted stock, assuming his marginal tax rate is 32% and he 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. $15,000 gain and $2,250 tax.
E. $15,000 gain and $4,800 tax.
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