South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
42nd Edition
ISBN: 9781337702546
Author: James C. Young, William H. Hoffman, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 19, Problem 4CPA
To determine
Calculate the amount and character of income recognized by Person J during year 2.
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On March 1 of year 0, Fran was granted an incentive stock option (ISO) to purchase 50 shares of her employer’s stock for $10 per share. The FMV on the date of the grant was $12 per share. On May 1 of year 1, Fran decided to exercise her option when the stock was selling for $13 per share. Then on July 1 of year 2, she sold all of the shares at $20 per share. What is the amount and character of income Fran recognizes in year 2?
On February 1 of Year 0, John received a nonqualified stock option to purchase 100 shares of his employer’s stock for $10 per share. At the time John received the option, it was selling for $5 per share on an established exchange. On September 1 of Year 1, John exercised the options when the stock was selling for $19 per share. On December 1 of Year 2, John sold all of the shares for $30 per share. What amount and character of income does John recognize in Year 2?
$2,000 ordinary income
$2,000 long-term capital gain
$1,500 ordinary income
$1,500 long-term capital gain
On January 1, year 1, Dave received 2,200 restricted shares from his employer, RRK Corporation. On that date, the stock price was $18 per share. On receiving the stock, Dave made the 83(b) election. 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 $29 when his shares vest and will be $56 per share when he sells them. Assume that Dave's predictions are correct and answer the following question.
What are the consequences of these transactions to RRK?
Grant Date $
Vesting Date $
Sale Date $
Chapter 19 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 19 - Prob. 1DQCh. 19 - Prob. 2DQCh. 19 - Prob. 3DQCh. 19 - Prob. 4DQCh. 19 - Prob. 5DQCh. 19 - Prob. 6DQCh. 19 - Prob. 7DQCh. 19 - Prob. 8DQCh. 19 - Prob. 9DQCh. 19 - Prob. 10DQ
Ch. 19 - Prob. 11DQCh. 19 - Prob. 12DQCh. 19 - Prob. 13DQCh. 19 - Prob. 14CECh. 19 - Prob. 15CECh. 19 - Prob. 16CECh. 19 - Prob. 17CECh. 19 - Prob. 18CECh. 19 - Prob. 19CECh. 19 - Prob. 20CECh. 19 - Prob. 21CECh. 19 - Prob. 22CECh. 19 - Prob. 23CECh. 19 - Prob. 24CECh. 19 - Prob. 25CECh. 19 - Prob. 26CECh. 19 - Prob. 27PCh. 19 - Prob. 28PCh. 19 - Prob. 29PCh. 19 - Prob. 30PCh. 19 - Prob. 31PCh. 19 - Prob. 32PCh. 19 - Prob. 33PCh. 19 - Prob. 34PCh. 19 - Prob. 35PCh. 19 - Prob. 36PCh. 19 - Prob. 37PCh. 19 - Prob. 38PCh. 19 - Prob. 39PCh. 19 - Prob. 40PCh. 19 - Prob. 41PCh. 19 - Prob. 42PCh. 19 - Prob. 43PCh. 19 - Prob. 44PCh. 19 - Prob. 45PCh. 19 - Prob. 46PCh. 19 - Prob. 47PCh. 19 - Prob. 48PCh. 19 - Prob. 49PCh. 19 - Prob. 50PCh. 19 - Prob. 51PCh. 19 - Prob. 52PCh. 19 - Prob. 53PCh. 19 - Prob. 54PCh. 19 - Prob. 55PCh. 19 - Prob. 56PCh. 19 - Prob. 57PCh. 19 - Prob. 1RPCh. 19 - Prob. 2RPCh. 19 - Prob. 3RPCh. 19 - Prob. 6RPCh. 19 - Prob. 1CPACh. 19 - Prob. 2CPACh. 19 - Prob. 3CPACh. 19 - Prob. 4CPACh. 19 - Prob. 5CPA
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