Stevie recently received 1,000 shares of restricted stock from her employer, NicksCorporation, when the share price was $8 per share. Stevie's restricted shares vestedthree years later when the market price was $11. Stevie held the shares for a little more than a year and sold them when the market price was $16. Assuming Stevie made asection 83(b) election, what is the amount of Stevie's ordinary income with respect to the restricted stock?

Question

Quizplus · Accepted Answer

When a section 83(b) election is made, the recipient of restricted stock includes the fair market value of the stock at the time of the grant as ordinary income. In this case, the stock was valued at $8 per share at the time of the grant, so Stevie's ordinary income is 1,000 shares x $8 = $8,000.

Stevie Recently Received 1,000 Shares of Restricted Stock from Her