Matt just started work with Boom Zoom Inc., a manufacturer of credit-card-sized devices for storing and playing back music. Due to the popularity of its devices, analysts expect Boom Zoom’s stock price to increase dramatically. In addition to his salary, Matt received Boom Zoom restricted stock. How will Matt’s restricted stock be treated for tax purposes? Should Matt consider making the

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(b) election? What are the factors he should consider in making this decision?

From a tax perspective, would this election help or hurt Boom Zoom?