On January 1, year 1, Dave received 2,400 shares of restricted stock from his employer, RRK Corporation. On that date, the

stock price was $16 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 $40 per share when his shares vest and

will be $50 per share when he sells them. Assume that Dave's price predictions are correct and answer the following questions:

b. If Dave's stock price predictions are correct, What are the tax consequences of these transactions to RRK?

Taxes Benefit

Grant Date

Vesting Date

Sale Date