On January 1, year 1, Dave received 1,800 shares of restricted stock from his employer, RRK Corporation. On that date, thestock price was $10 per share. On receiving the restricted stock, Dave made the 83(b) election. Dave's restricted shareswill 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 helpfund the purchase of a new home. Dave predicts the share price of RRK will be $45 per share when his shares vest andwill be $64 per share when he sells them. Assume that Dave's price predictions are correct and answer the followingquestions: (Leave no answers blank. Enter zero if applicable. Round your final answer to the nearest whole dollarvalue. Enter all amounts as positive values.)b. If Dave's stock price predictions are correct, what are the tax consequences of these transactions to RRK?> Answer is complete but not entirely correct.laxconsequences18,000 X0♥0✓Grant dateVesting dateSale date$$Prev3 of 9Next >

Answer:- The Internal Revenue Code's (IRC) 83(b) election allows an employee or startup founder to…

Answered: On January 1, year 1, Dave received…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On December 7 of the tax year, S (a single taxpayer) decided to sell all of the stock that she owns and reinvest the proceeds in state of Colorado bonds. Information about the stock is provided below: Corporation FMV Basis Holding Period ABC $180,000 $130,000 11 months LMN 200,000 255,000 5 years XYZ 382,000 300,000 2 years She is willing to sell some of the stock this year and the remaining stock next year if it is more advantageous to spread the sales over two years. Assume the fair market value of the stock will not change and her regular tax rate is 32% (and will be 32% next year). (Disregard present value calculations and the medicare tax on net investment income.) Determine the change in her income tax for the two years combined if she sells ABC and LMN this year and XYZ in March of next year.
Jared, age 54, earns $300,000 per year and is a participant in his employer's 401(k) plan. Ignoring the ADP Test requirements, what is the maximum amount that Jared can defer under the 401(k) plan in 2019? O $19,000. $25,000. O $56,000. O $62,000.
Kenjie owns shares of stocks of Luna Corporation ,a domestic corporation. He decided to sell the share son February 14, 2021. The details are as follows: FMV at sale P10,000,000; Selling Price P7,500,000; and Cost P4,000,000. The donor's tax due on the sale is: a. P150,000 b. P135,000 c. P525,000 d. P60,000
Carmen owns a cornershop. During the 2020 tax year, Carmen bought trading stock worth $77,000 and sold trading stock worth $125,000. All items include GST. Required: Calculate how much GST Carmen must remit to the ATO at the end of the 2020 tax year.
John, age 40, is single and has the following income and expenses for 2020: Salary $170,000 Net rental income $7,200 Dividend income (qualified) $4,000 Interest from TD bank $65 Interest from City of Phila bonds $1,200 Loss on sale of section 1244 stock purchased directly from the Corporation $40,000. Alimony payment (divorce finalized December 30, 2018) $12,000. Loss on personal auto as a result of an auto accident $2,500 Contribution to traditional IRA $5,000 Charitable contributions $750 Mortgage interest on personal residence $12,000 Real estate taxes $4,500 State income taxes $5,219 Parking ticket (occurred during work related meeting) $100. Medical expenses (not reimbursed) $4.980. Calculate John’s AGI, taxable income and tax liability for 2020.
Sadie sold 11 shares of stock to her brother, George, for $600 sixteen months ago. Sadie had purchased the stock for $800 two years earlier. If George sells the stock for $1,000 what is the amount and character of his recognized gain or loss in the current year?
Hannah Tywin owns 100 shares of MM Inc. stock. She sells the stock on December 11 for $25 per share. She received the stock as a gift from her Aunt Pam on March 20 of this year when the fair market value of the stock was $18 per share. Aunt Pam originally purchased the stock seven years ago at a price of $12 per share. What is the amount and character of Hannah's recognized gain or loss on the stock?
(1) Carol owns 4,000 shares of the stock of ABC Corporation. In 2019, in exchange for some of her shares, Carol receives a check for $400,000. Her basis in her entire interest in ABC Corp was equal to $1,000,000, and her adjusted basis of the exchanged shares is equal to $250,000. ABC had $1,200,000 of Earnings & Profits as of the end of the 2019 tax year. In 2018, Carol sustained stock market losses equal to $175,000 and has a LTCL carryover to 2019 equal to $172,000. (a) Assuming she has no other items of income or loss in 2019 and does not itemized her deductions, what are the tax consequences to Carol if the redemption of her shares does not qualify for sale or exchange treatment under §302? The tax consequence (b) Assuming she has no other items of income or loss in 2019 and does not itemized her deductions, what are the tax consequences to Carol if the redemption of her shares does qualify for sale or exchange treatment under §302?
Louis is an employee of Birch Corporation, On February 1 2021, she received a non statutory stock option from her employer giving her the right purchase 100 shares of Birch stock for $30 per share. The option is not traded on an established market and its value could not be readily determined when it was granted. On September 6 2022 Louise exercised the option and purchased 100 shares of the stock. Which she exercised the option . The fair market value of the stock was $90 per share. How much compensation should be included in Louise 2022 income as a result of exercising the option. A) 0. B) 3000 C) 6000 D) 9000
Gary receives $40,000 worth of Quantro, Inc., common stock from his late grandmother's estate. Early in the year, he receives a $100 cash dividend. Four months later, he received a 2% stock dividend. Near the end of the year, Gary sells the stock for $42,000. Due to these events only, how much must Gary include in his gross income for the year?
In June of 2019, Kevin inherits stock worth $125,000. During the year, he collects $5,600 in dividends from the stock. How much of these amounts, if any, should Kevin include in his gross income for 2019?
When James retired as managing partner of “James and Jerry, CPAs,” he was entitled to a retirement annuity of $75,000 per year until he died. Is this arrangement allowed by the California Accountancy Act? Why or why not?

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