On January $1,$ year $1,$ Dave recelved $1,000$ shares of restricted stock from his employer, RRK Corporation. On

that date, the stock price was $$7$ per share. On recelving 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 $$30$ per share when his shares vest and $$40$ per share when he sells them. Assume that Dave's

price predictions are correct, and answer the following questions:

Note: Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable.

Requlred:

a$.$ What are Dave's taxes due if his ordinary marginal rate is $32$ percent and his long$-$term capital gains rate

Is $15$ percent?

b$.$ What are the tax consequences of these transactions to RRK$?$

Complete this question by entering your answers in the tabs below.

Required b

What are the tax consequences of these transactions to RRK$?$