On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $7 per share. 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 will be $40 per share when he sells them.
On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $7 per share. 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 will be $40 per share when he sells them.
Chapter19: Deferred Compensation
Section: Chapter Questions
Problem 52P
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Please explain proper steps by Step and Do Not Give Solution In Image Format ? And Fast Answering Please ?
Transcribed Image Text:b. If Dave's stock price predictions are correct, what are the tax consequences of these transactions to RRK?
Grant date
Vesting date
Sale date
Tax Benefit
![Required information
Problem 12-33 (LO 12-2) (Static)
[The following information applies to the questions displayed below.]
On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On
that date, the stock price was $7 per share. 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 will be $40 per
share when he sells them.
Note: Leave no answer blank. Enter zero if applicable. Input all amounts as positive values.
Problem 12-33 Part a (Static)
a. If Dave's stock price predictions are correct, what are the taxes due on these transactions to Dave if his ordinary marginal rate
is 32 percent and his long-term capital gains rate is 15 percent?
Grant date
Vesting date
Sale date
Taxes Due](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcc262a17-aea7-4022-9fe8-cae21a346dc3%2Fd0ae9025-a3ce-4768-bb2c-c993c0769816%2F71bdva8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Problem 12-33 (LO 12-2) (Static)
[The following information applies to the questions displayed below.]
On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On
that date, the stock price was $7 per share. 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 will be $40 per
share when he sells them.
Note: Leave no answer blank. Enter zero if applicable. Input all amounts as positive values.
Problem 12-33 Part a (Static)
a. If Dave's stock price predictions are correct, what are the taxes due on these transactions to Dave if his ordinary marginal rate
is 32 percent and his long-term capital gains rate is 15 percent?
Grant date
Vesting date
Sale date
Taxes Due
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