Required information [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 $ 60,00 $ 58,eee $45, eee $45, eee Health insurance No coverage $ 5,eee $ 5,600 $ 5,600 Restricted stock 1, eee shares NQO'S @ 188 options Assume that the restricted stock is 1.000 shares that trade at $5 per share on the grant date January 1. year 1j; shares are expected to be worth $10 per share on the vesting date at the end of year t; 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 $3.000 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). C. 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 and Form 8949 for the sale of the restricted stock. Schedule D Form 8949 PG1 OMB No. 1545-0074 SCHEDULED (Form 1040 or 1040-SR) Department of the Treasury Internal Revenue Service (99) Name() shown on ratum Capital Gains and Losses Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Schedule for instructions and the latest information Use Farm 2949 to list your transactions for lines 15, 2, , 8, 9 and 10. 2019 Attachment Sequence No. 12 Your coolal crourity number Did you dispose of any investment(s) in a qualified opportunity fund during the tax year? Yes No If "Yes," attach Form 8940 and see its instructions for additional requirements for reporting your gain or loss. Parti Short-Term Capital Gains and LossesGenerally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines below. (9) Adjustments to (d) Proceeds (sales () Cost (or other gain or loss from (h) Gain or loss) Subtract column() from price Formis) 1949, Part 1 column (C) and combine the result with column] This form may be easier to complete if you round off cents to whole dollars Ina 2. columna 1a Totals for al short-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 al these transactions on Form 2949, leave this line blank and go to line 1b 1b Totals for al transactions reported on Fom(s) 8949 with Box Achecked 2 Totals for al transactions reported on Fom(s) 8949 with Box Bchecked 3 Totais for al transactions reported on Fom(s) 8949 with Box C checked 4 Short-term gain from Farm 6252 and short-term gain or loss) from Forms 4684,6781, and 8824 5 Net short-term gain or (loss) from partnerships, Scorporations, estates, and trusts from Schedules) K-1 6 Short-term capital loss carryover. Enter the amount, if any, from line of your Capital Loss Carryover Workshost in the instructions 7 Net short-term capital gain or loss). Combine lines ta through 6 in column th). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part Ill on the back Part II Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) (a) Adjustments to See instructions for how to figure the amounts to enter on the lines below. (d) Proceeds (sales (e) Cast (or other gain or loss from (h) Gain or loss) Subtract column() from price This form may be easier to complete if you round off cents to whole dollars Forms) 1049, Part column (C) and combine the result with column) II,in 2 columnal Ba Totais for allong-term transactions reported on Fom 1099-B for which basis was reported to the IRS and for which you have no adjustments see instructions). However, if you choose to report al these transactions on Form 2949, leave this line blank and go to line ab Bb Totals for all transactions reported on Fom(s) 8949 with Box D checked 9 Totals for all transactions reported on Fom(s) 1949 with Box Echecked 10 Totals for all transactions reported on Fom(s) 8949 with Box Fchecked 11 Gain from Form 4797 Part 1; long-term gain from Farms 2439 and 6252; and long-term gain or loss from Forms 4684,6781, and 8824 12 Not long-term gain or loss from partnerships, corporations, estates, and trusts from Schedules K-1 13 Capital gain distributions. See the instructions 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Caryover Workshoot in the instructions 15 Netlong-term capital gain or (ss). Combine lines Ba through 14 incolumn (ht. Then go to Part III on the back 15 For Paperwork Reduction Act Notice, tee your tax return Instruction Cat. No. 11338H Bohedule D (Form 1040 or 1040-BR) 2018 THIB FORM 18 A SIMULATION OF AN OFFICIAL U. 8. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT U BE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2020 MoGraw-Hm Education. Schedule D Form 8949 PG1 Form 8949 Department of the Treasury - Intemal Revenue Service Name) shown on ratum Sales and Other Dispositions of Capital Assets OMB No. 1545-0074 2019 Go to www.irs govi Farma949 for instructions and the latest information. File with your Schedule to list your transactions for lines 11. 2. 3. , 9, and 10 of Schedule D. Attachment Sequence No. 12A Social Security number or taxpayer identification number Before you check Box A, B or below see wherer you received any Form/) 1099-5 or substitute statements from your broker. A substitute statement will have the same Information as Form 1099-8. Emer will show whether your besis (usually your cost was reported to the IRS by your broker and may even tell you which box to check. Parti Short-Term. Transactions involving capital assets you hold 1 year or less are generally short-term (see instructions). For long-term transactions, see page 2 Note: You may aggregate all short-term transactions reported on Form(s) 1099-8 showing basis was reported to the IRS and for which no adjustments ar codes are required. Enter the totals directly on Schedule D. line 1a; you aren't required to report these transactions on Form 8949 se instructions). You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 1949, page 1, for each applicable box. If you have more short-term transactions than will it on this page for one or more of the boxes, complete as many forms with the same box checked as you need IA) Short-term transactions reported on Forms.) 1099-B showing basis was reported to the IRS Se Note above) B) Short-term transactions reported on Forms.) 1099-B showing basis wasn't reported to the IRS IC) Short-term transactions not reported to you an Form 1099-B 1 le Cost or other basis. Adjustment, any, to gain or loss. If you enter ih Gain or loss. (d) Proceeds (sales an amount in column (g), enter a code in Subtract columna See the Note below and (a) Description of property (b) Date acquired (Mo., Date sold or disposed of column" See the separate instructions from column) and Example: 100 sh.XYZ CO see Column() in the Cay, V price) (see (Mo., day, yr) combine the result with instructions) separate instructions (9) Amount of (1) Codes) from instructions adjustment column 19) 0 2 Totals. Add the amounts in columns (d), (e), (g) and (h(subtract negative amounts) Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), Ine 2 (Box B above is checked) or line 3 [if Box Cabove is checked) Note: If you checked Box A above but the basis reported to the IRS was incorrect, enter in column() the basis as reported to the IRS, and enter an adjustment in column to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment For Paperwork Reduction Act Notios, Gee your tax return Instruction. Cat. No. 377687 THIB FORM IS A SIMULATION OF AN OFFICIAL U.B. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT U BE THIS FORM FOR TAX FILING B OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL 2018 Mo Graw-Hill Education. Form 3849 (2018)