Required information [The following information applies to the questions displayed below.) Pratt is ready to graduate and leave College Park. His future employer (Ferndale Corporation) offers the following four compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January 1, year 1. Option 1 $ 72,000 Benefit Description Salary Health insurance Restricted stock NQO's Option 2 $ 60,000 $ 5,400 Option 3 $ 55,000 $ 5,400 1,000 shares 0 Option 4 $ 55,000 $ 5,400 No coverage 0 100 options 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 allows 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 $3,600 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). 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. Visit the IRS website and download 1040 Schedule D. 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." Required information [The following information applies to the questions displayed below.] Pratt is ready to graduate and leave College Park. His future employer (Ferndale Corporation) offers the following four compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January 1, year 1. Benefit Description Salary Health insurance Restricted stock NQO's Option 1 $ 72,000 No coverage Option 2 $ 60,000 $ 5,400 Option 3 $ 55,000 $ 5,400 1,000 shares 0 Option 4 $ 55,000 $ 5,400 0 0 100 options 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 allows 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 $3,600 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). Assuming Pratt chooses Option 3 and sells the stock on the vesting date (on the last day of year 1), complete Pratt's Form 8949 for the sale of the restricted stock. Visit the IRS website and download Form 8949. 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." Required information [The following information applies to the questions displayed below.) Pratt is ready to graduate and leave College Park. His future employer (Ferndale Corporation) offers the following four compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January 1, year 1. Option 1 $ 72,000 Benefit Description Salary Health insurance Restricted stock NQO's Option 2 $ 60,000 $ 5,400 Option 3 $ 55,000 $ 5,400 1,000 shares 0 Option 4 $ 55,000 $ 5,400 No coverage 0 100 options 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 allows 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 $3,600 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). 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. Visit the IRS website and download 1040 Schedule D. 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." Required information [The following information applies to the questions displayed below.] Pratt is ready to graduate and leave College Park. His future employer (Ferndale Corporation) offers the following four compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January 1, year 1. Benefit Description Salary Health insurance Restricted stock NQO's Option 1 $ 72,000 No coverage Option 2 $ 60,000 $ 5,400 Option 3 $ 55,000 $ 5,400 1,000 shares 0 Option 4 $ 55,000 $ 5,400 0 0 100 options 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 allows 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 $3,600 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). Assuming Pratt chooses Option 3 and sells the stock on the vesting date (on the last day of year 1), complete Pratt's Form 8949 for the sale of the restricted stock. Visit the IRS website and download Form 8949. 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