Required information Comprehensive Problem 12-50 (LO 12-1, LO 12-2, LO 12-3) {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 $ 60,000 $ 50,000 $45,000 545,000 Health Insurance No coverage $5,000 $ 5,000 55,000 Restricted stock 1,000 shares 100 options NQO'S @ e @ 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 1 and no 83(b) election is made Assume that the NQOS (100 options) each allow 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) Comprehensive Problem 12-50 Part 1 (MUST MANUALLY GRADE) Download the Tax Form and enter the required values in the appropriate fields. 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 for the sale of the restricted stock Please right click on the attached Adobe document and select open in new window. Then. download the Tax Form and enter the required values in the appropriate fields. Save your completed Tax Form to your computer and then upload it here by clicking "Browse." Next, click "Save." Use 2018 tax rules regardless of year on tax form. 1 / 2 - 67% + 10 SCHEDULE D (Form 1040) OU Capital Gains and Losses Attach to Form 1040 or Form 100 Go to www.insgow Schedule for instructions and the latest Information Use Form 1948 to list your transactions for lines 1, 2, 3, 5, and 10 2018 Deport of the Tom nel Nam Aachen 12 Youtube Part 1 Short-Term Capital Gains and Losses --Generally Assets Held One Year or Less (nee instructions) See instructions for how to figure the amounts to enter on the les below Preds This form may be easier to complete if you round off cents to web Fomei whole dollars 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 the instruction) However, if you choose to report all these transactions on Form 8949, leave this line bank and go to line 1b 1b Totals for all transactions reported on Form) 1949 with Box A checked 2 Totals for all transaction reported on Forms) 8949 with Box Bchecked 3 Totals for transactions reported on Forms 1949 with Box C checked A 4 Short-term gain from Form 6252 and short-term gain or loss) from Forms 4634, 6781 and 24 5 Net short-term gain or poss) from partnerships S Corporations, estates, and trusts from Schedules) K-1 5 6 Short-term capital loss carryover. Enter the amount, if any, from line 3 of your Capital Loss Carryover Worksheet in the instructions 7 Net short-term capital gain or loss). Combine lines ta through in column you have any long- term capital gains or losses, go to Part. Il below. Otherwise, go to Partill on the back Partil Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) See instructions for how to figure the amounts to enter on the nes below Pro This form may be easier to complete if you round off cents to prio for the whole dollars line 2 Ba Totals for a long-term transactions reported on Form 1099-8 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 bank and go to line 8b Sb Totals for all transactions reported on Forms) 8949 with Box D checked 9 Totals for all transactions reported on Form) 1949 with Box Echecked 10 Totals for all transactions reported on Form) 8949 with Box F checked 11 Gain from Form 4797, Part long-term gain from Forms 2439 and 6252 and long-term gain or loss from Forms 4684, 6781, and 5824 11 12 12 Net long-term gain or loss from partnerships, corporation states, and trusts from Schedules) -1 13 Capital gain distributions. See the instructions 13 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 14 15 Net long-term capital gain or loss). Combine lines Ba through 14 incolumn. Then go to Partillon the back 15 For Paperwork Reduction Act Notice, see your tax return instructions CAT Scho 018 2 / 2 - 67% + | OOS Scherm 100 2014 Pe 2 Part III Summary 16 Combine lines 7 and 15 and enter the rest 16 If line 16 is a gain, enter the amount from line 16 on Schedule 1 Form 1040). in 13. or Form 1040NR line 14. Then go to line 17 below It ne 16 is a loss, skip line 17 through 20 below. Then go to line 21. Also be sure to complete line 22 It ne 16 a zero, skip lines 17 through 21 below and enter 6-on Schedule 1 (Form 1040), line 13. or Form 1040NR. Tine 14. Then go to ne 22 17 Arelines 15 and 16 both gains? Yes. Go to line 18. No. Skipines 18 through 21, and go to line 22 18 #you are required to complete the 28% Rate Gain Worksheet (see instruction, enter the amount, if any, from line 7 of that worksheet 19 you are required to complete the Unrecaptured Section 1250 Gain Worksheets Instructions enter the amount, if any, from Ine 18 of that worksheet 20 Arelines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, Ine 11 for in the instructions for Form 1040NFL,Ine 4) Don't complete lines 21 and 22 below No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete ines 21 and 22 below 18 19 21 time 16 assenter her and on Schedule 1 (Form 1040), line 13. of Form 1040NR. in 14. the smaller at The loss on line 16 53.0001, or marted faing separately. (S1,500) Note: When figuring which amount is smaller, treat both amounts as possive numbers 22 Do you have qualified dividends on Form 1040, line 30. Or Form 1040NR. In 1067 Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a for in the instructions for Form 1040NR, line 42) No. Complete the rest of Form 1040 or Form 1040NR. Schum 1 2018