1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
seropon [69]
3 years ago
14

RRKCorporation. On that date, the stock price was $7 per share. On receiving the restricted stock, Dave made the §83(b) electio

n. Daveâs 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. Assume that Daveâs price predictions are correct and answer the following questions: (Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable.)
a. What are Daveâs taxes due if his ordinary marginal rate is 30 percent and his long-term capital gains rate is 15 percent?b. What are the tax consequences of these transactions to RRK if its marginal rate is 35 percent?
Business
1 answer:
S_A_V [24]3 years ago
5 0

Answer:

$1350 OR $5100

Question (in proper order):

1. 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 $31 per share when his shares vest and will be $40 per share when he sells them. If Dave’s stock price predictions are correct, what are the tax consequences of the date of vesting to Dave if his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent?

OR

2. 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 $6 per share. On receiving the restricted 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 $30 per share when his shares vest and will be $40 per share when he sells them. Assume that Dave’s price predictions are correct. What are the tax consequences of the date of grant to Dave if his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent?

Explanation:

Answer to Question 1

Dave has no tax consequences on the grant date. On the vesting date he will recognize ordinary income of $31000 and pay taxes of $9920 which is calculated below:

a) shares acquired                                 $ 1000

b) fair market value at vesting date    $31

c) ordinary income on vesting date      $31000 (1000*31)

d) ordinary marginal tax rate                32%

e) tax due when shares vest                    $9920 (31000*32%)            

Dave will owe $1350 on the sale date as calculated below:

f) amount realized                                    $ 40000 (1000 shares*40 per share)

g) adjusted basis                                      $31000 (given above c point)

h) long term capital gain                     $9000 (40000 – 31000)

i) long term capital gain rate          15%

j) tax due when shares sold                1350 (9000*15%)

Answer to the question 2

On receiving the restricted stock, Dave made the §83(b) election

Dave will owe no tax on vesting date since he made the §83(b) election

Dave tax consequences on the grant date is that he will recognize $6000 of ordinary income and pay taxes of $1920 as calculated below:

a) shares acquired                                 $ 1000

b) fair market value at granting date    $6

c) ordinary income on granting date      $6000 (1000*6)

d) ordinary marginal tax rate                32%

e) tax due on grant date                                $1920 (6000*32%)          

Dave will owe $5100 on the sale date as calculated below:

f) amount realized                                    $ 40000 (1000 shares*40 per share)

g) adjusted basis                                      $6000 (given above c point)

h) long term capital gain                     $34000 (40000 – 6000)

i) long term capital gain rate          15%

j) tax due when shares sold                5100 (34000*15%)  

You might be interested in
What are things you can do to manage the risks in your life to reduce any financial losses?
meriva
Spend carefully use discounts monitor your spending create list on how much you spend etc.
5 0
3 years ago
Read 2 more answers
why might a bank offer to make a loan to a consumer at a low initial rate which will increase after a set period of time?a. too
Whitepunk [10]

I believe the answer is: c. to make the loan look more attractive and competitive now

By offering it at low initial rate, the people who borrow money would experience low burden if they plan to return the money within short period of time. This would make them much more likely to obtain a loan, and it also would make the bank that create the loan program looks better compared to their competitors.

8 0
3 years ago
Universal Travel Inc. borrowed $501,000 on November 1, 2021, and signed a 12-month note bearing interest at 7%. Interest is paya
Anon25 [30]

Answer:

Interest = $5,834.67

Explanation:

In November 1, the note bears 12 month = 7%

From November 1 to December 31 = 2 month

Hence for 2 month Interest = 2 * 7/12(%) = 1.1667%

Thus, interest = $500,100 * 1.1667%

Interest = 5834.6667

Interest = $5,834.67 approximately.

3 0
3 years ago
Match the example with the business structure that makes sense for it. To match the items, click the example, and then click the
Kazeer [188]

Answer:

Doug and Vanessa- partnership

Esperanza- sole partnership

Robyn- c corporation

Cuba- s corporation or LLC

Ming- nonprofit corporation

I hope this helps someone!!

7 0
3 years ago
A. the ability to merely project one's abilities in the lack of actual accomplishments B. the ability to reduce the dependence o
MissTica

A leadership is best described as the ability to influence a group toward the achievement of a vision or set of goals.

<h3>What is a leadership?</h3>

In a formal setting, this refers to individual ability to influence, lead and guide others people to accomplish a predetermined mission in the manner desired.

Hence, it is best described as the ability to influence a group toward the achievement of a vision or set of goals.

Therefore, the Option D is correct.

Read more about leadership

<em>brainly.com/question/12522775</em>

#SPJ12

4 0
2 years ago
Other questions:
  • A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledge
    9·1 answer
  • Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the (i) supply is more ela
    8·1 answer
  • Priya Rahavy, M.D., is a general practitioner whose offices are located in the Lake Forest Professional Building. In the past, D
    15·1 answer
  • One advantage of preferred stock over common stock is that preferred stockholders
    14·2 answers
  • The Nixon Corporation’s common stock has a beta of 1.7. If the risk-free rate is 4.8 percent and the expected return on the mark
    11·1 answer
  • An investment advisor has a client base composed of high net worth individuals. In her personal portfolio, the advisor has an in
    5·1 answer
  • Careers that have 6 letters
    9·2 answers
  • A cost incurred in the past that is not relevant to any current decision is classified as a(n):_________
    10·1 answer
  • Cookies by casey has sales of $487,000 with costs of $263,000. interest expense is $26,000 and depreciation is $42,000. the tax
    15·1 answer
  • The united auto workers is an example of a(n) union.craft industrial occupation and associational
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!